As I understand it, there's no theology council and each Holder, being spiritually superior to those around them, gets to interpret the Scriptures as they desire. Given the Scriptures are a living document, they can probably pick and choose which scriptures are important and which can be ignored.
As long as you don't piss off other people in power, you can probably have your own personalized version of Faith... that said:
The rationalisation that I've used is that the Kingdom's religious nature is a sham.
Of course it is a sham. Not totally since we still see Khanid Zealots and other illuminated Khanids.
I think sham is a rather poor word here.
The People's Temple Agricultural Project was a 'sham' but when Jim Jones ordered his followers to commit suicide, 907 people ended up dying from drinking poisoned kool-aid.
Do the people at the top manipulate beliefs for their own goals and profits? Sure, a number of them do. But that's going to be just as true in the Kingdom as it is in the Empire or State or Federation. And for every belief, there are going to be ardent followers, people who are just doing what everyone else does, and people who are questioning what's going on.
I think what you're seeing is simply cultural: The Khanid value religion but they prioritize it differently.
It's like being in a small, Southern town vs being in a small, West Coast town. The West Coast town will have fewer believers and their attitude toward the church is going to be different. That doesn't mean West Coast churches are corrupt or their version of Christianity is a sham.
If anything, an area where the religion is paramount is more prone to abuses. Those in religious positions have more social power and can get away with a great deal more.