Okay, I'll wade in here...
Using "Illusion Powers" to disguise yourself would be to not just overlay a person's face on your own, it would be to actually make a physical change your face's bone structure, skin solor, hair color, etc. for the duration of the magical effect (which *could* be quite substantial). "Sense Rune Power" would not sense "Illusion Magic" except while it was being cast - once the 5 second (or however many you think it takes to work your magic) spell/feat is performed, "Illusion" is no longer active. Once the spell is performed, it is not continually "powered by illusion magic", it just "is". As far as the World is concerned, the person under the influence has been that way for his natural life, and will continue to have it (subject to normal aging, etc) in the future. (I'm not a fan of the "Cosmic Clock" theory that an illusion's 'lifespan' can be measured)
The difference between "Illusion" and "Disguise" is somewhat like the difference between Plastic Surgery and a Mask - Once the scars heal from PS, you (nominally, let's assume everything went wonderfully) can't tell that the person didn't have that face for all his or her life. A mask, on the other hand (even if it is as good as in Mission Impossible) can give itself away - it may make the face less expressive, or have a distinct transition from "Mask" to "Flesh", and it can always be ripped away by combat, leaving shreds of plastic and adhesive behind.
So someone looking at the scene even with "SRP" running would see "That guy with the black mustache" kill the king. Unless you followed Black Mustache backwards in time to when he actually used magic to change his face, you won't get the feeling that he's not had the mustache for a long time. You wouldn't say "hey, he's acting under an illusion". SRP would say nothing about the illusion, because there is no illusion.
Is the name a bad one for the power? Probably. It is certainly confusing (as evidenced by this thread), especially to players of Other Games who run into Illusory Walls or Dragons that can be disbelieved. The more traditional "Overlay"-type magic really requires a different name - "Disguise" magic, or "Glamor" (not to be confused with "Glamour, the Lunar Capital") or something similar. I'd probably rule that "Disguise" magic can be detected because some power is "on", keeping the disguise up. It may be a bastard child of true "Illusion" magic, or deserve it's own rune. "Disguise" magic should also be detectable by use of "Truth", "Vigilance" or similar magic - Humakt and Rigsdal should be able to see through Disguise magic (subject to ability ratings and die rolls), but not an Illusion.
True "Greg-style, Make a bit of Reality" Illusion magic should be a rare commodity, while detectable "Disguise" magic should be the more prevalent type. True masters of Illusion (as opposed to Disguise) should be restricted to wackos like Eurmal. After all, you're playing with primal stuff here, and do you *really* want someone sane fooling with reality? :-)
RR
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