Just sic him at a worthy opponent and he'll be happy. If anything, I think he's grateful to Yayoi for satisfying him to such an extent.
When it comes to severing his contract with the Kamiyo Clan though, that might be when some discipline is required...
The healing isn't a result of the Bunrei's defeat. If you look at Masakado's fisting again, right before all the light energy poured out, he had cracks all over his body. And right when they poured out, his armour is gone and he's back to his regular form.
That is, Masakado could no longer maintain his New Emperor form at battle's end, so the form cracks and disperses all its energies back to the land.