Dead Water

As far as dragonsplague goes, in-game it is a 'sickness' that pawns can catch and pass to one another. It makes them defiant and act on their own accord, refuse commands, and have more independent reactions. It also makes them stronger and they can take more attacks and rest less often. It takes a week or so for it to 'mature', and if you decide to sleep at an inn or at a dwelling, they will cause a 'calamity' and kill all the npcs in the area, including important ones. No worries, however, they respawn in time but the non-essential npcs can be brought back with a wakestone. If you sleep at camps, it can be passed on or even 'cured' (maybe the pawn decides to nuke a forest area or something.) Below is a few screenshots of what dragonsplague looks like in-game. Pawns may cough, have comments they normally do not, act like they have headaches, and look agitated.

With all that, on surface level it seems like a pretty bad thing, but in the context of the game's story, which puts a lot of weight on the concept of 'will' and choice, dragonsplague actually offers some taste of 'will' to pawns, something they're generally unfamiliar with. I tend to either veer a little off the tracks here and in my story dragonsplague is a bit of a kink in the Arisen's hold over their pawn, but it leaves the pawn subject to their origins, Oblivion (which is a concept of destruction, nothingness.) Dragonsplague also reveals Liam's true self, a dragon. This form isn't dangerous when it's Liam in control of himself, it's dangerous when Oblivion hijacks him and forces him to submit to Oblivion. While dragonsplague allows Liam to act more independently, it also leaves him vulnerable to Oblivion's nature and thus, control. If Oblivion gets a hold of him completely, he acts erratically, he's dangerous and unpredictable, and is a real threat to Kraus, which in turn is also a threat to Liam himself as Kraus is the only one that can call him back from beyond the Rift if he were to ever fall/die. Oblivion is not something that has a face or reason, it just is, and Liam tries desperately to separate himself from it during their travels. It's not something he can simply 'sleep off' at camp, it's something he has to fight off, something Kraus has to deal with, but in it Kraus notices Liam making choices that are completely harmless and made because Liam 'wants' to do x thing at x time, has wants ect. Over time, with a lot of tempering and growing as a person, Liam is, after many labors and struggles, able to overcome Oblivion and tears himself away from it (mostly, Oblivion has a way of wanting to be whole again and Liam 'stole' from it by sheering himself.)

Liam, while under Oblivion's command, can take on more unsettling shapes, and can speak in voices that are not his own. Liam's essence and self is far, far away when hijacked completely.

As an added note, Liam is not a normal pawn, he was not 'created' by his Arisen. Rather it was Liam that clamored and chased after Kraus' greater will as it was likely to be one of the only chances of him ever escaping Oblivion's hold. He had a consciousness and sense of self since far before Kraus' time, and with that he had just enough will to make the decision to give his will up to escape. From Kraus' perspective, having his will 'chased' by a rogue entity from beyond the Rift was unsettling. Liam came forth, took a shape he chose and was natural to him, and even had a name for himself. Kraus didn't care either way, he wanted nothing to do with Liam, with pawns, with him being Arisen, but he is a dutiful man at heart and he felt he wasn't living for much anyhow so begrudgingly allowed Liam to follow at his heels. Dragonsplague strikes later, when Liam is 'killed' and sent to the Rift, and there he is vulnerable as he is far away from his Arisen's protective will and Oblivion makes attempts at dragging him back.