The main problem with The King's Demons (and there aren't many problems at all with what is an underrated story) is that any scheme by The Master that is confined to two episodes is going to seem terribly minor in scale. And, sure enough, his plan to try and stop the groundwork being laid for Magna Carta is, as The Doctor himself says, "small time villainy by his standards".
Still, the concept of Kamelion is intriguing enough, but so much attention is given to him (it?) in introducing the technology behind the machine that it seems almost inevitable that he will become a companion by story's end. This, as history would prove, would be a mistake, as the person who was responsible for building and operating the Kamelion prop tragically died soon afterward, not that the prop functioned beautifully to begin with. It was just something that John Nathan-Turner saw in passing, was impressed by, and, without much forethought in the logistics of making it work, crammed it into the show and left it to others to think up a reason for it being there and what to do with it, as well as the others whose lines and screen time it would be taking away.
In the event, though, much like this story itself and the explanation of how The Master escaped from Xeriphas, Kamelion would be largely forgotten until his final story, Planet of Fire. Or would he? Given that Kamelion is a shape shifter by trade, surely he will be seen in future episodes even though we don't realize it, couldn't he?