1) Spirit sword removes a die icon. Does that mean if it is used against say Ardus equipped with Reaping blade who rolls a red die with a single hit. If I cancel that hit, does it then mean he gets a mortal from Reaping blade?

2) Does flank fire allow you to pick threat from your trays while using it with fire rune? I would assume fire Rune gets the priority so you still have to use the runes, but I don't think there is an actual rule about priority for this.

I know these aren't fully release/revealed, but what is everyone's opinion on these?

1) not sure

2) Fire rune never gets threat from trays, only runes. You would want to choose whichever configuration gets you more rerolls.

1) From what I see I think:

10.5 Step 5—Modify Dice: Both players may resolve any
abilities that allow them to modify the dice results.

40.1 If both players have effects with the same timing, the first
player resolves all of his effects with that timing first.

40.2 If multiple units have the same initiative, the players take turns
activating them one at a time starting with the first player.

So if the first player is Ardus He would modify all of his dice first an still have a die icon, so reaping bladed doesn't go off. If the second player has Ardus then the Latari player chooses to use spirit sword and then the second player can modify dice and add a mortal strike. So it depends on what player has reaping blade.

They should make a definitive ruling so it isn't player dependent. Or other people can chime in with rules I haven't considered.

2) See above, @Jukey nailed it.