A warlord off his floor may forfeit and live — but crawl rules supersede, and a host cannot leave the floor.
Carl asks whether there is any path of negotiation where Epitome Tagg can surrender and survive. Baroness Victory says the rules are pretty clear: if he is not on the floor anymore, he can forfeit and still live.
Then she closes the door. Crawl rules supersede faction rules, and a host cannot leave the floor — so Louis cannot leave, and Tagg therefore cannot get off the floor to forfeit. Carl's follow-up about abdicating to Team Retribution's crawlers fails for a different reason: Tagg is literally the only one left of his faction, so he stays a warlord. "So it's impossible," Carl says. "It appears that way, yes."
The loophole that exists in theory and is blocked in practice by the crawl's precedence over faction rules.