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Battle brothers can now embark in each other's transports.

Scenario: A unit of daemons, let's say Bloodletters, are equipped with an Icon of Chaos and embarked in the Land Raider of a CSM allied detachment.

Question: Does the Icon of Chaos work while they are embarked?

Daemons Codex p.64:

...if the first model from a friendly unit arriving by Deep Strike is placed within 6" of at least one model with an Icon of Chaos, the following rules apply...

Since the model with the icon is embarked in the transport, I would argue (as the Daemon player, so obviously) that the effect is in play and deep striking daemons of the same alignment can pop down without scattering.

The rule doesn't specify that the effect is nullified if the wielder is embarked in a transport. However, at the time this codex was written, Daemons didn't have the option of being embarked in non-apocalypse games. The word "model" must be specified, because it is not the unit wielding the icon, but a single model of the unit.

Is the model not still "there" where the transport is, philosophically? If we were able, we would open the Land Raider door, shove in 10 models, and then move the transport around the table.

Thanks for your consideration. I hope I formatted this post properly and provided the right details. Please let me know what you think.

I think it works as we are told to measure from the hull for effects from the embarked unit other than shooting.

The only point of contention would be as you said the fact this wasn't a possibility when the book was written. So without a FaQ specifically detailing any exceptions it looks fine to me.

I don't know where exactly, but I do remember there being a rule that deamons can never embark on transports from other armies.

Not that I am aware of.

The only prohibitive rule that I'm aware of us "Daemonic Alignment" which states:

Daemons can only join units that are composed entirely of Daemons of the same alignment as themselves.

I'm relatively certain that embarking on a transport is not the same thing as "joining a unit."