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I am looking forward to this with great interest! The previous Chapter Creator was a lot of fun.

Edit: Two comments so far.
1) Chapters rarely have explicit disadvantages from their genetic defects. In fact, it usually gives them some sort of advantage. The Space Wolves get the option to take Mark of the Wulfen; the Blood Angels get Red Thirst.
2) I suppose you're working on this, but it would really help to have some references to the different rules. Even if it's just saying where you can look them up ("C:SM p.146"), it'd be very helpful. I don't know what some of these are.

Very nice progress!

Chapter A: I like the progression from proud heritage to divergent, to lost, to outcast. I think the way it progresses the ability to take characters and relics is a good match with the selection of traits.

I do have one thing I dislike about the Ultramarines, which transitions into...

Chapter B:

I don't like the following traits:
Armageddon War Veterans
Damocles Crusade Veterans
Tyrannic War Veterans
Veterans of the Black Crusades
A Legacy of Hatred
and to a lesser extent Strength of Body.

These have nothing to model, and they're extremely specific to a particular type of enemy you're facing. If you pick Tyrannic War Veterans and your opponent isn't Tyranid, you've lost a huge opportunity for another benefit. Even worse, if they ARE Tyranids, then you've heavily tilted the matchup in your favor, without any real challenge.

Imagine if you've got a buddy who keeps beating you with Chaos Space Marines. And then the next time you meet, you say, "Oh, I modified my army a bit... we've dropped Honed Senses, we're now Veterans of the Black Crusades." Would that be fair?

Some of these are in the core rulebooks, and honestly I can't fathom why. They're terrible there too. It just makes matches unbalanced from the start of the game, and I think it's much better for every game to be strategically challenging. Why make some hopeless and others trivial?

Is Balefire an official rule? It seems to change a lot all at once.

All in all, looking good! I'm pleased to see it continue to progress.

 lord_blackfang wrote:
Modeling isn't a problem, you got trophies and dead bodies on bases appropriate to the foe.

Those traits can remain, but should be made more opponent-neutral by focusing not on a specific faction but rather its archetypical playstyle

Armageddon War Veterans - not a bonus vs Orks but a bonus vs melee swarm armies in general (like more flamers, or better rapid fire, or defensive grenades...)

Tyrannic War Veterans - bonuses vs MC (Poison, Fleshbane, Instant Death...)

Veterans of the Black Crusades - bonus vs 3+ saves (Rending, access to AP3 bolter rounds or whatever)

Damocles Crusade Veterans - this one is tricky, but maybe something to counter enemy mobility or firepower

Ah, wonderful ideas. Model the veterancy with trophies, basing, etc. And give benefits that would still make sense from the fluff without just being tailored to one army.

These examples are a little too weak, but they're the sort of thing I would like to see:

Armageddon War Veterans - Tactical squads can take Heavy Flamers as heavy weapons. (Too weak, but might be a component.)
Tyrannic War Veterans - Tactical squads can load their bolters with hellfire rounds for +10 points.
Veterans of the Black Crusades - Tactical squads can load their bolters with vengeance rounds for +10 points.
Damocles Crusade Veterans - Tactical squads can have the Stealth rule for +10 points.

It's true you don't want to have redundant options. Is Flamecraft already from Salamanders? If so, it should take priority. Otherwise, you might give preference to the fluffier, history-related name for the trait.

I agree that giving stats is to be avoided. Not only does it offer potentially unbalanced bonuses, it also requires more bookkeeping and risks confusion.

I'm also not sure about using Pistol weapons as melee weapons. It's the sort of thing I'd enjoy seeing in 8th edition- plasma pistols would be much better if you could use them in close combat at full strength. But I feel like it's mucking about pretty deep in the rules at that point. I'm not sure I'd want that change to be in a single codex.