The way this game handles making choices is actually brilliant in hindsight; you're not just making a choice, you're deciding between which of Jin and Cassius' courses of action you wish for Dust to take.
The residents of underground city of Mudpot speak with a southern American accent. It's easy to pass this off as a style choice until you realize that the game refers to the four cardinal directions by how they relate to the world map (left of the screen is west, right is east, etc).
During the war sequence- no matter how vicious his fighting gets- Dust never strikes allied NP Cs. However, this is also an example of Gameplay and Story Integration: Ahrah is a compassionate being, and (if Dust's ability to jump higher while attacking a target is any indication) is directing Dust's attacks to some extent. Of course he wouldn't attack allies!
It may also have something to do with how the Cassius part of Dust is an incredibly skilled fighter - he's good enough to just not hit allies.
In order to be able to buy forge-able materials in the shops, you have to take the material from a monster you killed, then sell it to a merchant. This is fine and all, until you realize that one of these items is a Dog Tag. How the merchant gets his hands on these can only be left to the imagination.
At the time Dog Tags becomes an available resource the war between the Moonbloods and Gaius' army is in full swing. It's not entirely unreasonable to expect that Moonblood soldiers sell or give looted dog tags to the merchant.
Going back to older cutscenes after The Reveal, realising that Ahrah has been lying to Dust literally from the minute he came into the world as a conscious entity, gave him a name based on what he is, and has been manipulating him the whole game to assure that he's a suitable Laser Guided Tyke Bomb to take out Gaius. And these are the good guys.
The Moonbloods are the good guys? Says who? While Gaius is certainly taking extreme action, he seems like a pretty reasonable fellow all told, and if you think about it, the Moonbloods brainwashed Cassius into doing their dirty work for them. If such mind control has been done previously, it is no wonder that General Gaius and the King wanted to wipe them out.