Hello and welcome,
Town phase offers up a lot of opportunity for discussion.
There is a Town AP here: https://forums.burningwheel.com/t/town-phase-ap/23465
QUESTION ONE
With TB, roleplaying and mechanics go hand in hand. So, it really depends. That particular law might require some creative solutions, but since this is Karolina’s hometown, we would expect there to be a home or place to stash stuff. Mechanically, players can create a cache at town, camp, or base camp to stash stuff anyway. Check out DH p 87-88 for more.
QUESTION TWO
Somewhere in the forum or elsewhere Thor wrote up a nice paragraph about Skogenby and how the adventurers are not really welcomed by the locals for very long. In other fantasy games, characters are heroes returning victorious, and they are greeted with cheers and free drinks at the tavern. That’s not the case with TB. You might get one free mug of cheap mead, but the adventurers will quickly find that they are not welcome in town and the locals will do everything they can do quickly expedite their stay. That is the part of being a vagabond, sell sword, or murder hobo that distinguishes this game from many traditional fantasy games.
Page 97 sets the tone:
[Town] is a safe haven and a place to sharpen steel and draw up new plans, but it’s no place for the likes of us. Without title, letters of recommendation or enough lucre to drown in, we’re treated little better than chattel.
You are right that different towns will have different reactions though. Town phase is a great opportunity to establish those relationships. So, this is Karolina’s hometown, how was she treated before? What has changed? There’s lots of room for character development there to explore with the player.
QUESTION THREE
The book offers sage advice of the first respite being around Level 3. From there, in my experience, I go about 2-3 adventures or about 9-12 sessions. I use the Middarmark weather and seasons, so I advance the months each camp and town phase appropriately, although it is not necessary to really keep track of the exact date. However, really it is about taking a moment to reflect on the growth of the characters. Have they changed enough to warrant a respite?
QUESTION FOUR
The way I run it is established that all loot is divided at the gates as evenly as possible so as to avoid greedy behavior. The rules say to split treasure, but do not say exactly how, so you have some flexibility. However, TB is a team game, and hoarding loot is a recipe for disaster. The way I think of it is that all these professional thieves are not going to forget about treasure, so it would be pointless to try and hide it from the group. So, divide the treasure evenly or as the group agrees when entering town.
QUESTION FIVE
See if the above AP answers that question.
QUESTION SIX
Yes, the alfar in the Middarmark are elusive. And Luke had some good advice somewhere on the forum that the non-human stocks serve as “spice” to the adventures. I think that is a good guiding principle. I figure elves would be seen a little bit more to the north, but not so much in the south. The reactions would be varied: some with fear others with wonder or astonishment and everything in between. All of that is good fodder for Town Twists. However, you have the flexibility to make the world how you see fit, but maybe this stirs in some ideas.
QUESTION SEVEN
Town phase is great for that sort of stuff. Count it as Research or Personal Business depending upon the narration by the player. Then, it is a test and a lifestyle cost for the action.
QUESTION EIGHT
Check out the Hire Help section starting on page 110. Otherwise, you can cobble together the requirements such as Finding Someone (Circles test + lifestyle), and then paying for their services (+lifestyle).