So i've just started reading the WN translations, and in Arc 5 Chapter 17 there is a discussion between Julius and Subaru about Heinkel's relationship with Reinhard. It goes something like this :
Julius: “There was a period of time when Reinhard gave Heinkel-sama his complete, utmost obedience. That might seem natural since they’re father and son, but... that time exceeded the bounds of what it should have been.”
Subaru: “...so, to keep Heinkel from giving Reinhard an order to turn against the kingdom, Heinkel was shown favor, right?”
Julius: “Perhaps it’s even worse. Although this is still a rumor that is considered hearsay, I’ll tell you, since you’re also Reinhard’s friend, and you felt anger for his sake.”
With that troubling opening remark, Julius looked over their surroundings with a sweep.
Confirming that there were no eavesdroppers, he stood close to Subaru’s side.
Julius: “The deputy commander was a suspect in the investigation of the abduction of the princess fourteen years ago.”
Could it be that Heinkel is the deputy commander and that he is affiliated of the abduction of Felt/the Princess. (I am using Felt as the princess as her age and appearances fit with the royal family.)
Although I think Felt might be linked somehow to the Royal family, we still don't know how and why she was 'abandoned by Heinkel' i.e. ended up in the slums and raised by Old Man Rom. I suspect that it is not as simple as just is the missing princess and tbh I think the abduction was likely instigated by Pandora. A lot about the whole backstory and reasons for the Royal Selection are really shady and weird in my opinion.
For example, as I also noted in the Arc 5 translations, why would the Dragon select Crusch as a Royal Candidate when she wants to willingly tear up the covenant (unless that's it's objective)? Why is it so well-timed that Subaru appears in this world right before the Royal Selection? Everything seems planned or pre-destined imo.
So I think there's a deeper mystery than just Heinkel abducted Felt/a Princess, I think there is a link to Pandora in there somewhere.
Or I could be talking out of my ass and the reason is that simple - that maybe Heinkel did it so as to divide Wilhelm and Thereasia and save himself from going into battle. Questions, questions.
The Dragon didn't chose Crusch. It was the Insignia, which is just an stone that determinds if the holder has the necessary qualities to participate with the Royal Election. It isn't really that much related with Borucanika