So, I see two main issues we have with this character. The Chaos Surge table and the karma system.

What I'm thinking would be easiest to do would be to eschew the table entirely and just bake variable effects into each spell in a manner similar to Fortune's Transit. While I can understand that this is a collaborative story and not a tabletop game the core concept behind this character does require that element of chance which best befit dice rolls. I feel it would be simply cheesy and dare I say unfair to make a character who's spells effectiveness are decided by chance only to simply have a party dictate the results as, regardless of how fair the adjudicator wishes to be, the results would ultimately be biased. In addition much like in any MMO RNG is a very real element, with elements like dodge percentages and crit rates dictated by the engine that runs it. While this world functions as though real it was still modeled after an MMO if I understand correctly.

In my case my idea was to write up a class that specifically leaned into that particular element, leaving more up to chance in exchange for greater flexibility in the spells cast. The idea would be a class that would encourage taking risks in exchange for banking karma, rewarding the caster for saving their karma by granting them a greater degree of control over a single spell the longer they stockpile it. In essence by indulging chaos Mercurio would be afforded more control when he needs it most. I do agree though that karma shouldn't necessarily offer more power specifically and I'd not include spells that would just result in flatly increasing it's own power through expenditure of karma.

As for the karma system itself what I could do is just implement a soft cap that allows him to bank karma up to a certain amount and past that maximum he'll continue being able to gather more karma but each point stored would expire roughly an hour or so after it was obtained. That way while in the short term he could gather a reasonably high karma amount in the long term he would be limited to his cap, preventing him from obtaining an obscenely high amount of karma and not having to worry about random chance ever again in his magic.

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As for why he'd be involved with the group it's hard to say. The story is ever shifting and I do not have the freedom to weave his destiny to specifically entwine with the group's own. That would be something for the gm and I to discuss for they have much more of a say in that than I. I can say that I'd probably characterize Mercurio as less like a Cicero-esque figure and more like that one merchant from The Undead Burgh in Dark Souls. A bit unusual, maybe even a little suspect but still reasonable enough to do business with.

As I've mentioned though if he is deemed ill-fitted I do have other ideas I can put forward. I'd want to put forward the summary of each idea first though to make sure they are acceptable and see which would be preferred.