It mentions in the rules that: "A follower may be deployed to a castle as a baron. The baron is not considered to be part of the city or farm in which his castle is located."
So to clarify:
1) Can a baron be placed in an already occupied city, regardless of who has majority ownership?
2) If laid in a city the castle tile won't contribute any points for the city owner upon city completion?
1) Yes. The Baron is a
specific term applied to a follower who is placed in the castle depicted on the LOTM tiles. This is different from a follower occupying the
city. When a castle tile is laid, extending a city, the player may choose whether to deploy a follower: as a knight (in the city), as long as the city is not already occupied by another knight; or as a Baron (in the castle) - in this way there can be a knight already occupying the city. When the city is completed, the follower occupying the castle as a Baron does not partake in scoring for the city (he is not a knight) and he is
not removed from the castle after scoring for the completed city has taken place. The Baron is only removed once the castle is surrounded by 24 tiles as explained in the rules.
2) If the castle is laid in the city, the tile itself still scores as a tile that extends a city for the owner of the city.
EXAMPLE: The castle is laid by the Green player and extends a city already occupied by a Blue knight. Green places a follower as a Baron to the castle. The city is later completed with 4 tiles surrounding the castle tile (a city comprising of 5 total tiles). The city scores 10 points for Blue (but zero for Green) because the city is completed with 5 tiles (including the castle tile). The Blue knight is now removed from the city as scoring for his city is complete, but Green remains as a Baron, occupying the castle. Green is not removed until the castle is surrounded by 24 tiles (as LOTM rules).
Hope this helps.
