What happens to damage on Tree Kin, if I use its action to become a development instead of a unit? Does the damage go away or does it stay on the development, so that Tree Kin is still damaged when it reappears at the end of the turn?

Thanks!

I believe it will be the same as the developements that become units. If they take damage, but are not destroyed, the damage is removed when they return to being a developement. Here, a damaged Tree Kin that becomes a developement, loses its damage. I believe this is the main reason for its ability. Being a developement for a short time has very few other advantages, but I suspect some good combinations will be found. Cheers!

Well, I believe that the main reason, why it has been made this way, is that it can create nice combinations with the new support cards. But I wonder if changing its status to development actually makes it a new card that loses all damage on it. We didn't have a card that flips face down and reappears at the end of the turn as part of its effect before.

It loses all damage. Only units and capitals can have damage on them.

You can also flip him over as a response to several cards that target a unit. When the action stack resolves, he is a development and the original card can no longer target him. Such as Flames of Tzeentch.