It's not clear who would have the majority if functional constituencies were eliminated. The pro-Beijing camp got a higher proportion of the popular vote than the anti-Beijing camp in the last Legislative Council election.
Yes, democracy is limited in Hong Kong. The city has never been ruled democratically. The issue now is that Beijing will not take the risk of allowing separatists to take power.
As for the Chief Executive's actions, it's not entirely clear to what extent she's responding to popular pressure, business groups in Hong Kong that want stability, or the central government.