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Actually, in the anime there was already a dog hollow, so we can assume that it's not a first. We can also assume that besides them being dogs, there's not much difference between them and normal hollows as Rangiku was able to slay it just like a standard hollow.

The only difference, perhaps, is that it was actually two dogs fused into one hollow, this is probably brought on by the fact that animals have lower intelligence than humans thus are less susceptible to extreme misery and suffering, the prerequisites of hollow devolution. So, they fused together and the combined malevolent emotions proved adequate.

Mashiro Link-ku! [X]

So, yes, it's allowed but it's not exactly a unique character ability.

Yes, it's basically standard soul burial and hollow attraction.

This special ability was developed from Mikito's ground breaking love for animals, and origened from an experince with an animal hallow from a long lost friend, basically, Mikito attracts hallows that were once animals and animal spirits as well, but the point being, Mikito can come in contact with the animal spirit inside the hallow, Mikito touches the hallow's mask and it breaks apart, showing the identity of the hallow animal and then forming a new mask, a special black, red and white mask of the animal signifying that Mikito has pulled out the animal's conciousness, it can aid Mikito in battle until there is no need to fight anymore, and the hallow simply disinigrates automatically getting purified. This shows Mikito's weakness as he can't bring himself to kill any animal hallows.