@Kaarme
To add to what others have already said; people in this world are above and beyond greedy. Any easy advantage to rise even slightly above someone else is worth the reason. So they allow some old codger who has no beef with them to go around being a douche canoe, because they could just ride coattails.
Should they have removed him because of his obvious and evil ties, less morally inclined people would then use the barring to complain about their own removal. Honestly not making it worth the hassle.
Then, as seen in this very chapter, disguises are easily able to completely fool even the wisest of cultivators (unless plot demands them to not be). So that winner you just crowned, surprise, it was an old, evil bastard all along.