I can't remember if the spyware/malware that was related to FATE was from the game itself or from WildTangent, the original parent company/software distribution method, but I do know it used to do a lot of malicious stuff (pre-install executable for other software, overwrite registry entries, prevent uninstallation...).

Was all this behavior caught and scrubbed?

Since the question has not been answered by the developer or GOG after more than a year, the answer is probably YES. I am interested in it too! The first game FATE was offered for free download around 2012. I always played the game on a computer with Windows Me that was not connected to the internet. On my current Linux system using Wine, the game does not work with the old installer. The reason could be the spyware/malware. *?
FATE: The Cursed King
is younger. But I don't dare to buy this game because I have to assume that it won't work either.