Wow this is still rumbling on.
Well, when in doubt consider the source material. This game is after all an abstraction of the War of the Ring as depicted in the books/film, and any attendant material added for flavour or clarification by GW*. As I saw in another thread.. if in doubt in the SBG rules follow the source books and text for common sense. So same here. You might have to House rule it but i would allow Sauron the Overlord rule and the Rohan and Gondor banner to be army banners, even if I am facing them. It really looks to be an oversight and the intention is made plain elsewheer in the text. This isnt a rule system with a world created around it (like other 40k or fantasy) but a way to have fun toasting elvies or spitting orcses and still keep the feel and flavour of the seminal fantasy epic.
*Of course it doesnt mean GW alwasy interpret correctly... Cirdan clearly at the end of RotK is described as having a beard. The model does not. Now bearded elves may go against the now popular image of tall pointed eared skinny beings as being elves, and with no facial hair. But as that image more or less entirely comes from Mr JRRT's, it does open some conversion possibilities
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