Holy fuck, was NOT expecting that. I'm not sure what the twist is gonna be. I don't really see Shida getting the boot from the Six Fingers because when she betrayed Atori they said it was good because she managed to gain their trust and earn a more permanent position near Iruma. I don't think the little old guy was lying either, Iruma likely IS in danger too right now. I mean the Six Fingers are with Kirio/Baal and they need Iruma, Narnia I don't believe is in on their real plans iirc.
I'm sorta hopeful this is the nail in the coffin for Narnia, lock his ass up Henry.
It was a good thing at the time because it kept Shiida at the school.
You have to remember that it was less that Shiida had betrayed Atori and more that Atori had seriously fucked up the mission and tried to salvage it in the most crude and ineffective way possible. Atori's screw up was to the point that even Amduscias was revealed to be an ally of the Six Fingers just to get Atori out of there.
Shiida beating up Atori allowed for the Mission to be save and her to remain at the school.
As others have said, there's no reason for only Shiida to lose the effect of the memory wipe. After all, it's not like Iruma's the first to remember her, so it likely didn't have anything to do with him.
Regarding Narnia being a threat to Iruma. That's ofc a guarantee. However, even Narnia isn't dumb enough to go directly after Iruma while at Babylis. And even if he were, he would've done so long before now. We even saw that Narnia attacked Shiida, not Iruma. As powerful and fast as the cerberus are in the Kalego family, Narnia shouldn't have any issue taking out Iruma before Shiida even had a chance to notice.
Which simply means that Narnia's true target isn't Iruma in this moment, but Shiida. Now sure, if Iruma interferes, then Narnia has ample reason to go after him, but the main objective is taking out Shiida.
As for his reason to take out Shiida, it simply goes back to Baal. After all, Narnia already knows that Shiida and Atori are criminals, as he was the one to approve their transfer to Babylis, and considering that he's working with Baal, it shows that he long knew of Shiida and Atori's true nature.
So since Narnia already knew of Shiida, and had not only refrained from attacking her but also help orchestrated her transfer to Babylis, it stands to reason that he's not attacking her due to her status as a criminal, and thus he has no personal objective for harming her. Since it's not on Narnia's end, there's only one possibility for Narnia's attack on Shiida, and that's Baal.
Like someone said, Baal seemed to have noticed or sensed Shiida's faltering loyalty. As a result, she's effectively became a loose end that needed to be handled. If Baal was to do this, the most effective manner would be to have Narnia handle it. Because that achieves getting rid of Shiida in a 'clean and legal' manner that would also allow for Baal's involvement to be further covered up. This makes the 'warning' effective, because it not only compels Shiida to act, but also takes advantage of her growing affection towards Iruma to rush by his side. This is especially the case, with the newfound knowledge of him being a human, which makes the idea of protecting him even stronger.
Any other method would risk having Shiida captured questioned by either Babylis or Henri, and if that happens, Baal can't guarantee that she won't talk and reveal his involvement.
Long story short; it simply comes down to what is more likely:
* Narnia pissing off his one and only major ally just to go after Iruma in an obvious failed attempt to kill him. Which would lead to Narnia knowingly pissing off at least 6 of the Thirteen Crowns (Sullivan, Bachiko, Azz's Mom, Henri, Mephisto, and Baal).
OR
* Baal realizing that Shiida may turn against him and thus made 'arrangements' to have Narnia kill Shiida, and cover their tracks.
Sure, they'll lose an insider at Babylis, but it shouldn't matter because as we learned just two chapters ago. Iruma, as a second year, will be expected to venture outside of Babylis. This would mean that he wouldn't be under the constant protection of the school.
Now I will say this. I do expect that Narnia is operating on an additional and personal mission to expose Iruma as a Human. This is especially the case since we saw that he was trying to hint at the possibility to the Defense Border, only to be shot down by Henri. If Narnia does succeed in that regard, he'd likely be able to undermine Henri's position to an extent.