Stormwind Guards are spawning with the Horde debuff, and I suspect the king is Horde flagged too, but couldn't check since I went there on the Hunter thinking I was the Warrior and got killed very quickly.
EDIT: Guess some higher powers are watching these events too since all the Horde flagged players and NPCs disappeared within the time it took me to log off from the Hunter to log back on the Warrior.
EDIT #2: Now everything is Horde except for Andwin Wrynn. This is getting quite amusing again. I just saw the last Alliance Elite (Battlemaster Alison) turn Horde after a fight with the king, she turned Horde during the fight, with halth of her health pool, and then proceeded to chase Alliance players out of the keep.