I could see Dominion space getting more choatic, especially at the fringes. They did throw a lot of resources at the Alpha Quadrant, and very few of their expeditionary force made it home. Between that and Odo joining their conversation, they might be pulling back into secluded contemplation and leaving their client states, and to a degree even the Vorta and Jem'Hadar, to their own devices and direction.
Rogue Jem'Hadar are always good for a laugh, especially when it turns out they're basically on the same mission as you but they don't know if you can be trusted to keep their involvement secret from the Founders...
As to the Dominion collapsing, I think that's out of scope for our scenario. It would probably result in a dozen pocket empires like the Delta Quadrant with the core of the Dominion worlds like a sharp edged diamond that no-one dares cross. Even simple exploration becomes an extended diplomatic challenge.
Ok I guess we can choose the Wadi faction to remove from our NPC table. Any additional thoughts on what or how they gambled away some stuff, and with who? Perhaps a game with the Dominion that went badly, possibly due to cheating on the Dominion's part, and now their worlds are all Dominion territory and the ruling class replaced with either Vorta or Jem'Hadar.
I vote for keeping it simple: they were beneath the Dominion's notice, but an ambitious Vorta made official contact. The Wadi did their usual thing of assuming they'd want to play a game. The Jem'Hadar disagreed. Shenanigans ensued. Now their homeworld is in a vice-grip, the Dominion exploiting what they can militarise of their holographic technology, their culture is forbidden, and only a few wandering caravans are left, fleeing Jem'Hadar patrols into deep space.
I'm not sure about this part:
Plot Point 3: Mystery - Not Their Master. A Character is actually working for another (I interpret this as two rolls on Character List, which can include existing characters or new characters
This wouldn't be appropriate for Starfleet player characters, would it?