26" wheel in KH 29" frame?

No problem at all; I even managed to adapt to put V-brakes on a 26" wheel in a 29" KH frame. Pictures here.
Disk brakes would work fine for either size wheel, and a number of people swap out Mountainuni wheels in larger frames.
The only brake that couldn’t work (unless you’re really imaginative about adapters) would be a Magura rim brake.