The Direct out can be post fader if you like, but this sounds like a very complicated way of doing things, I would address the the mic settings themselves to help reduce feedback. Adjusting the PEQ to the room can reduce feedback dramatically, a slight angle change on the mic, or perhaps a different mic with a more directional pickup pattern. And maybe it’s time to address mic vs speaker placement, starting with a bad situation only makes it worse.
Most feedback processors are just going to turn down or off the offending frequency temporarily making for an inconsistent sound.