Can Leo and Banon be recruited in the World of Ruin?

You -could- cut down on the glitches that would necessarily happen, like anything with a Riding sprite, by simply making Leo/Banon un-recruitable until -after- you've done all the sidequests (or at least Cyan's dream sequence, have the game check for a 'completed Cyan's dream' flag). Additionally, you could make an event that triggers at all Chocobo shopkeep's dialogue that checks for Banon/Leo and says something like "Oh no, It seems some members of your party are TERRIBLE at riding Chocobos, they'll have to go home." and then remove them from the party.

I did think about making them recruitable after cyan's dream sequence has happened, or maybe cyan's dream event can be heavily edited so that mtek armors aren't needed.

I suspect that any event that removes them from the party will result in having to do the Recruitment event again. Which probably means there's no way to take them to Kefka's Tower due to the split-party nature of it. It also means that there's an unlimited supply of whatever Equipment they come with.

I made sure they'll appear in the recruiting screen once you exchange party members. The nice thing about the WOR's event coding is that most of it is done assuming generic characters, so little to none event hacking needs to be done. The pic down is when you try going to kefka's tower.

And if you only have -one- of them join in the WoR, then you'll at least have that one able to equip things.
By the way, I suspect that Leo's Equipment list is the same list as the Merit Award's "Heavy Armor" list.
If you remove the Imp status effect from the game, you may be able to assign the Imp Equipment list to Banon/another character.

This is a great idea! However, it doesn't solve the problem of leo not being able to equip relics. What if there were some custom events that allowed their properties to be changed and they could have better upgraded equipment after?

No clue what to do about the Colosseum.
To get rid of the Banon dies->game over thing, you could just remove the code entirely (though then it wouldn't happen at the Lete River either).

There's some code somewhere that removes the game over flag due to banon dying. Sounds like C2 is the bank for the code.

They won't learn Spells (there's just no room for a Spell list from what I can tell), BUT you may be able to tweak the code that gives Gogo the ability to use any party character's learned Spells when he equips the Magic skillset. The way the code is currently set up, Gogo's method of spell use is actually the DEFAULT, and then the game disables it for other PC ID#s. You may be able to expand the range of numbers that uses Gogo's method (this would mean giving Umaro and Gau the same feature, but you could just -not- give them the Magic skillset). I haven't looked at it extensively, but it could be interesting.

I agree, there are many interesting ways.

I wonder if Health/Shock work in Fanatic's Tower?

Just checked...Shock and Health aren't usable in the Fanatics tower...But health is the same as the cure2 spell, so why isn't it usable? I know Banon wasn't supposed to make it after the WOB, but it should've been included as a -usable- ability.