Well, there's different versions of this that Lillecarl has thrown around everywhere. I've only seen one that worked properly, and that was Rochet2's edited version of it that I implemented for a server awhile back with Guild vs Guild system. I might one day have to go through and do some fixes I guess.
Well, it seems the issue is the cross faction battlegrounds section added to player.cpp isn't being called or something. It doesn't say what team you are playing for on entry and it doesn't morph you, which stands to reason you won't be flagged properly.
Regardless, the version I linked earlier in the thread works 100% and works awesome as intended besides that males can't open professions. Females can no problem. If your unsure if this tutorial works or not, could you pretty please have a look to see if the reason for that is obvious?