You are irrefrangibly loyal to a person or institution with the trait Status to the absolute value of this trait +2. A person with Loyal -2 thus owes their allegiance to someone with Status +4.
Their word is law and everyone else is insignificant by comparison. You still have your own sense of ethics and motivations, but the loyalty can in many cases be at odds or even opposed to those values. It is possible to be loyal to several people or institutions, in which case they are each a separate trait and can be at odds with each other.
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