MC power is recognized but there are no real witnesses of his actions and the reports from the country that "manage" him would be seen by the others as pumped up and automatically nerf his abilities, because is what they do.
I re-read a couple old chapter because after half a year I needed a refresh, to me it feels like the enemy country nobles planned all of this, if they got the princess it would end up with the kingdom having only idiot royals, they would have succesfully removed the only obstacle to future political manouvers and calmed down their berserker for a while, if MC appeared and killed their super grade they remove a lose cannon they can't get rid off, in both cases is a win win, having that guy in their country was more problems than his valor as a human weapon.