The Companions of the Heart (spoilers LST)

[Farseer]

Davad and Ronica discuss this change in the role for the Companion of the Heart in Ship of Magic, Chapter Eighteen, 'Malta'. Speaking first of Malta's dressing up like a tramp going to the Harvest Ball:

'One of the Satrap’s, uh, Companions appeared thus. Uh, in the guise of a, uh, street woman. Not at a public function, but at a very large private gathering. To proclaim her, shall we say, complete devotion to the Satrap and his needs. That she was willing to, well, to be seen and treated as his, well…’

... ...

Grandmother only shook her head angrily. ‘This is what our Satrap has come to. He breaks the promises of his grandfather and father, and reduces the Companions of his Heart to whores for his bodily pleasures. Time was when a family was proud to have one of their daughters named as a Companion, for it was a post that demanded wisdom and diplomacy. What are they now? His seraglio? It disgusts me.

[o0Ampy0o]

Serilla says something about the role being to honestly advise the Satrap on their particular area of expertise.
I think the emphasis is on them being free to give the Satrap their honest opinion, and not being tempted to flatter him to gain favour as others in his court may do. In order to be free of the need to gain his favour it's implied that they would have a lot of power in their own right.

The "heart" aspect is the freedom to speak honestly in their field of expertise without threat of repercussion. The Satraps are surrounded by people with their own personal needs and motivations. The Companions are there to share their expertise and give straight advise as they are devoted to the Satrapy.

Any sexual relations might have only occurred as dirty secrets by less respectable Satraps. I don't recall Cosgo's father sleeping with his Companions of the Heart being stated as a fact, instead I think Cosgo projected his distorted outlook onto everyone and when he wondered whether his father had slept with Serilla it was only because Cosgo would do such a thing not that his father would have.

Hobb is such a great writer. Liveships was full of characters that grew to be likeable from being despicable. I did not care for Cosgo most of the time but I appreciated his growth and ability to see the value in Malta and her ideas. Seeing Malta's influence on him added to my appreciation of her character. She helped him grow up. As a result Cosgo actually became something good for Jamalia and Bingtown.