Player parties don't always have to love each other. I'm in a Pathfinder group where one of our party members ended up betraying the rest of us, almost died at our hands, left on his own adventure, and then came back. And now we're allies again. Character development happens and it would be boring if everyone happily held hands all the time.
Yes I do think that randomly gaining new powers such as mid-battle is something that shouldn't be. Technically, the things Herriman has shown to be able to do are not in conflict with his CS, but if other players feel like he's a bit to powerful, I would ask that you tone it down Daglobster.
Eventually you will be more commonly fighting together rather than against each other, allowing a bit more freedom in gaining and expressing more power. And of course I'll simply scale the difficulty of your enemies to match.