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Yeah I would assume an Imperial title requires giving up local ones.
Most imperial officials Commissars, Navy, Inquisitors come from the Scholastia P... something and are orphans with no family ties or loyalties other than the Imperium.
Is it possible? Sure. A million worlds, 10,000 years maybe there's an Inquisitor who executed a governor and declayered himself governor, or as you said maybe a planetary prince became an acolyte, made to Inquisitor and then assumed governorship.
My guess is it would not be normal and higher authorities would quickly deliver a harsh letter, followed if need be by an assassin.
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