Wow. Nicely done! I like the write up for Carmilla a lot and the whole Clan history is very well done, with two divergent legends about how the bloodline began (I tend to like the second one the best!).
The IC parts are well-written and add flavor while also providing useful information on running Karnsteins.
The Karnsteins are a nicely balanced minor bloodline which can easily be dropped into any Chronicle to add some flavor, but won't drastically distort any of the usual elements of the canonical WoD. There aren't enough of them to change politics and their signature Discipline, Pretense, is interesting without being overpowering.
With archetypes provided, there are LOTS of ways to incorporate Karnsteins into a game. Right off the bat I found myself designing a Golconda "Prophet" using the Pretense powers to lure gullible marks into eradicating themselves.
The Karnsteins are creepy and tragic and romantic all at the same time, which is as it should be!
[5 of 5 Stars!]