You've got that order backward.
ALL of them are going to die if Shurine/Hein lose. The condition for them to survive is on Shurine/Hein winning and save Lutecia if possible, not that Lutecia being alive is going to somehow make the bastard keep Shurine/Hein alive if they lose.
If anything any manpower the villain put towards keeping Lutecia hostage is less people Shurine has to deal with at the same time.
I know that. You aren't understanding what I'm saying.
Here, we got the bodyguard (you), the hostage, and villain (me)
If I'm overwhelmingly more powerful than both of you, then there won't be any hostage situation, I'll kill hostage when I see her, then kill you, or the other way around, it doesn't matter.
If I'm scared of you, I'll take a hostage (who I will kill after I killed you) as a leverage. My gamble is that you don't want the hostage to die, thus you won't be overwhelming me outright (because I can kill the hostage, who you don't want killed, before you can kill me.) If you don't care the hostage lives or die and rushes me, I kill the hostage, you kill me, and you walk away satisfied with that trade and would gladly do it again, well that just mean who I had was never really a hostage, it might as well be a chair.
What you're stipulating: "Shurine (and everyone) is going to die if she doesn't win this fight,
so her self preservation is going to make her fight all out regardless if Lutecia is currently still alive as a hostage or not. Because she won't be if Shurine loses anyway." The bold part is flawed because if that's the case Shurine (and all hostage situation) should just go nuclear and rush the head bad guy, guaranteeing Lutecia's death, in exchange Shruine gets to avenge her killing everyone afterwards. Which you may argue ought to be Shurine's course of action in this situation because her own life is on the line what other option does she have? But it's never the option chosen. And there's even a logical explanation/character study for that.
What the bad guy is doing here is:
I have a hostage, and I'm going to send guys to kill you now, I know you won't go down easy, so if my guys kill you, great. The hostage may have contributed to that it may not. But if all my guys lose to you, at least I still have the hostage to negotiate as long as it is in your interest that hostage survives. Unless you just straight up kills me before I can kill the hostage, in which case this entire presentation was moot because I never had a shot to begin with. Or if you don't negotiate and go for the kill and I kill the hostage then that's just what I already went over that above. Or you let me live and I let the hostage go etc.