We show that exceptional points (EPs) and non-Hermitian behavior can emerge dynamically in impurity models with Hermitian microscopic origins. Using perturbative renormalization group (RG) analysis, Fock-space diagonalization, and spin-spin relaxation time calculations, we demonstrate that nonlinear (NL) dispersion and anisotropic pseudochiral (PC) interactions generate complex fixed points and spectral defectiveness. The effective Kondo model features a square-root RG invariant linking planar and longitudinal Dzyaloshinskii–Moriya (DM) couplings, driving the onset of EPs. Our analysis reveals dissipative fixed points stabilized by an emergent Lie algebra structure and a scaling collapse in relaxation dynamics. Across both single- and two-impurity extensions, we identify a universal ``sign-reversion’’ (SR) regime near critical NL coupling, where anisotropy preserves PC symmetry and SR serves as a signature of non-Hermitian flow. These results establish a new class of non-Hermitian criticality generated through RG evolution in otherwise Hermitian systems.

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