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LayZzz: Let my guess,
Walter got rekt, but since MC is trying to prove he's not hostile unless provoked, he let him escaped.
The guy then go report to the king who, instead of giving order to form a subjugation force like he expect, punish him instead.
The explanation being that since Shin clearly was trying to settle it peacefully and given the things he's done (even just the golem part) he's clearly someone powerful.
So if not for Walter being an ass and antagonizing him, they could've make him an ally and the country could've benefited from his golems (be it labor, patrol, whatever)
But because of what Walter did, now Shin's going to be wary of the nobles, so it'll be harder to befriends him.