The hero, while I see, that he is mentally unstable, I do feel sympathy for him. Depending If he is a douch, that goes happy because, "OMG I'm isekaied and the Hero. Finally I can shine, because I'm the center of the Universe anyway!", well than he should take some lessons in humility. But if he is totally burdened, full of worries and feels, that the expectation put on him are to much for him, I pity him, but also cheer for him at the same time. That "All we must do is defeat the Demonking!" would be fitting, as he bailed out of a crushing situation, but taking an unreasonable deduction. And why not? The pressure put onto him is also unreasonable.
It really might be for the better not telling him or his mates, that the priest is strong. While he would might get a bit peace of mind, chances are he takes him as a way to escape the situation, rendering him useless. But I do see the danger, that the Hero doesn't take it well, when MC strength gets revealed. The best way to reveal it, is the Hero deduces it by himself while giving him the feeling, that it had to be kept a secret. Then he might be still pissed of, but if nobody (not even civilians) got hurt, chances are it'll be alright.