It's the only other possibility. Either Kuwanan has decided to become an enemy of the Lion (something Genji seems to think is unlikely given that he mentions Kuwanan's friendships with Lion members, or this is being done without his consent. I will however rephrase from "disposed off and replaced" to just "replaced" to make one less assumption.
What does it give away? All these are things Genji already knows and has realised if he's even halfway competent at his job. Considering that he qualified himself for a daimyo's karo he ought to be pretty darn competent.
(Sidenote: In Italian
caro, pronounced with a hard k, means sweetheart
)
Since the lore chack has come and gone without any big revelations, I've gone ahead and x-ed my vote.