Background:
There are three issues:

First, the island has two different names, Burning Bay and Burning Sea - one on the game-board Map and one in the rulebook for the island level map.

Second, uniquely among levels with multiple leaders there is no instruction for getting the red runekey. In every other level in SoB or RtL with multiple leaders there is a clear instruction for getting the red runekey - usually, but not always, by killing all the leaders.

Third, the leaders on this level are Master Spiders. They also have ShadowCloak. Master spiders have Swim. While the leaders start a long way from the water, they are fast and quite capable of getting to the water (especially as there are two of them). Once they get to the water they are almost invulnerable with the combination of speed, swimming and Shadowcloak. Unless a hero has Keen Sight (ignore shadowcloak) a hero must swim out into deep water
in order to attack them - whereupon they can easily move swiftly far away. The Revenge, BTW, is almost unable to maneouvre much on islands, and
certainly cannot get adjacent to the leaders if they make it to deep water and move to the edge of the map.
This may be intended. Or it may be an oversight.
It is very easy for even copper Bosses to be effectively invulnerable on this level. If they either lost the Swim ability, or did not have shadowcloak (there
are plenty of trees around to provide shadowcloak if they stay ashore) then there would not be a huge disparately in possibilities on this level.

Questions
Q1. Is Burning Bay and Burning Sea the same location?
A1. Yes
A2. No (please provide explanation!)

Q2. How is the red runekey obtained (the cavern entrance unlocked) at the Burning Bay/Sea level?
A1. By killing both leaders.
A2. By killing either of the two leaders.
A3. Some other method
A4. No red runekey is necessary. The cavern entrance on this level is unlocked.

Q3. Are the (Master Spider) leaders at the Burning Sea/Bay supposed to have both Shadowcloak and Swim abilities?
A1. Yes - harden up heroes! When the Leaders Swim out to sea then their Shadowcloak will mean they can only be killed by a very fast hero who chases them down.
A2. No. Remove the Swim ability from these two Leaders as they are too heavy for swimming.
A3. No. Remove the Shadowcloak ability from these two leaders.
A4. No. Remove the Swim ability from (leader 1) and the Shadowcloak ability from (Leader 2)
A5. Yes. However the Leaders from this level may not move off the island.
A6. Something else?

no comments before it goes in the FAQ proposal document?

Will you propose this question independently of the balance of SOB?

I will try to explain, it is difficult for me to say what I want Will you do X questions for the next FAQ, and a proposal to balance SOB? Or is this proposal split in questions into the FAQ?

gran_orco said:

This question is not related to a SoB balance document. This is for the FAQ. SoB balance would be about the whole campaign - general rules, not isolated things like this that can be fixed with a simple ruling (eg remove shadowcloak or swim - it is the combination that is broken).