1. I dont think any unit would refuse to fight. That has NEVER been an issue. This army (especially at the lower levels) is still a descendant of the British Indian army, with many of its strengths and weaknesses. That means soldiers are heavily recruited from "martial areas", and they are the sort of people who will do their duty as long as they are treated honorably and paid on time. The ideology of Jihad motivates them (thats a change from British times) against India and is one reason the army finds it easy to just pretend these taliban are Indian agents too. But even if that is out of the equation, they will do their duty. Individuals with Jihadi sympathies may be spying for the enemy and there may be some extremely extremely rare event where some fifth columnist cooperates with them in an attack, but on the whole, the army will fight who they are told to fight. A lot of the "Pakistanis love jihad so please pay us an extra ten billion to fool them" is just the leadership using Jihadis as a convenient excuse to get more cash out of uncle Sam. I am not saying there isnt a real reservior of support for jihadis in the general population, but its my impression its actually likely to be LESS in the army (using Jihad as motivator against India is a separate line item entirely). Army discipline is intact. Soldiers will fight because that is what the orders are and they obey orders..and in many cases, that is a longstanding (and honorable) tradition in their villages (though the martial race thing has been diluted, its not dead).
Does that make sense?
2. I doubt there will be a Mumbai unless the army wants one. That level of preparation and support is not something anyone can do without the secret agencies being helpful, or at least making sure they look away. Smaller acts of terrorism, sure, that can happen. But that was such a well planned, rehearsed, prepared, monitored and guided operation. That cannnot happen without connivance or at least determined "looking the other way".
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