... it was suggested that maybe the Poisoned Well gets discarded from Maiden's Bane when it becomes a character, because it is no longer attached to a location, and thus Maiden's Bane never goes back to hand.

It will be discarded when LMB becomes a character, but that doesn't stop you from triggering the Response and sending LMB back to hand while the attachment is in moribund. The exact sequence is as follows:

Step 1: Trigger LMB.

Step 2: Save/Cancel vs. LMB

Step 3: Resolve LMB - The location becomes a participating character with CBK, etc.

Step 4: Passives - The attachment's restriction/requirement ("Attach to a location") is no longer valid, so it is discarded (passively) and becomes "moribund:discard pile".

Step 5: Responses - Even though moribund, the attachment is still "in play." It's play restrictions are met, so it can be triggered. (Note: since it does not need to leave play again as a cost, there is no violation of the moribund rules here.) LMB becomes "moribund:owner's hand".

Step 6: End - LMB goes to its owner's hand, Poisoned Well goes to the discard pile.

There is a possible argument against being able to trigger Poisoned Well in Step 5, though. The moribund rules are clearly not an problem, but the fact that the location is a character at the time the Response is triggered might be. There are two sides to this argument, both potentially valid:

1) Play restrictions are checked at the time the Response is triggered, not at the time the Response opportunity is created. So the fact that LMB is a character at the time the Response would be triggered means that the "...after attached location's effect is triggered..." restriction is not technically met, stopping you from triggering Poisoned Well in moribund. It's the Dreadfort/Bolton Refugee/Winterfell Castle situation (as described in the FAQ) all over again.

2) The "attached" part of the restriction is the definitive identifying factor in the Response's play restriction. The fact that the card changes type as part of the effect's resolution doesn't change the fact that the identified card's effect was triggered, allowing you to trigger Poisoned Well in moribund.

Personally, I think #2 is correct and Poisoned Well is useful against locations like LMB and Iron Fleet Scout. I'd point to cards like Destitute Horde , Exhausted Horsemen , and Weary Swordsmen for support. Nine times out of ten, the Reinforcements event cards in question will be characters, not event cards, when their Responses are triggered, so a change in card type during resolution does not seem to negate an "after a (card type) effect is triggered" Response opportunity. But it might be best to check this detail for the LMB/Poisoned Well situation with Nate/FFG.

If a card can have more than one trait, keyword, house affiliation then what stops a card from being a Character and Location at the same time ?

If a card can have more than one trait, keyword, house affiliation then what stops a card from being a Character and Location at the same time ?

The FAQ, which explicitly states as much