Good catch, I had forgotten about that
Regarding your two points:
1). Although you have to set the registration up in the 1st level of FEAT, it’s not actually applied until the 2nd level. What the blog post helps you do is feed FEAT an identity matrix, so that when registration is performed at the 2nd level, it’s functionally doing nothing; the final result is just your fmriprep data.
2). Are you able to share your FEAT file (.fsf)? That may make debugging a bit easier.