Freeport is indeed gone. James Zwiers has spoken of writting a module dealing with its destruction but I suspect real life has derailed it. He did share his vision of what happened with the BI judges at Origins this year. I thought there was lots of cool stuff mentioned including a treacherous sealord, complaints from a mysterious source, and an apocalyptic end of the Island through "the Fury of Yarris." If you have the good luck to see James at a origins next year (or across the pond in England) buy him a beer and try to get the full story from him.

So, I understand that Expatriate does not Naturalize Citizens for reason of Flintlock possession. What about for paths that require a specific nationality? For example can you start in Freeport, take Expatriate as your background and then take a path that requires another nationality?

Nope.

Ok. Then is Expatriate supposed to reflect the PC that just is a wondering soul?

It's like a lot of expats in the real world. They live in the "new" country but are often not citizens and often lack some rights.