Edit: After doing some research, I'm better able to describe how this bug occurs.
Problem: If you find the Rathound King before you do the Burrower quest for Edgar in Camp Hathor, you're able to convince him to form a truce with the camp. When you get to the camp, however, there are no options to proceed with the quest. No one in town, including Edgar, has anything to say about it. You can still kidnap Sarine and that entire scenario plays out as normal, but the quest to deal with the Rathound King isn't open because (unknown to the player) they need to complete the unrelated "flooding the mine" quest first.
As a side note, it might be beneficial if the Rathound Regalia's description hinted at the fact that everyone in Camp Hathor will attack you if you wear it, or if maybe the NPCs said something like "It's the Rathound King! Kill him!" or something to that effect. It's not immediately obvious why they're hostile (even though it makes sense once you look it up), and it may cause a lot of confusion for the player -- not to mention a ton of lost playtime as they revert to old saves or even start the game over!
Update: If Edgar dies before the Burrower quest is completed, the quest doesn't get marked as failed (even though you can never turn it in). It just stays incomplete forever. You can still go through with flooding the mines, but the quest doesn't update in any way.
