Huh? Seriously? Lets say you were trying to provoke a fight with Dudeguy, wanting him to throw the first punch so you can claim self defense if the cops show up. Dudeguy, not wanting to fight, or kill you or whatever, goes and punches a fucking tree in half. Would you really want to start a fight with someone like that afterwards?Why would they be scared if none of them dies or even gets seriously wounded? They will soon notice they are suffering no casualties. At that point they would realise their opponent is under strict orders not to hurt them. What exactly would they be afraid of after that? Under such circumstances it would be much better to have a power to temporarily blind enemies, or something else along those lines. There would be total panic if half or just a third of them were rendered blind suddenly and remained so for the time being, making them perhaps believe it's permanent.
Second is putting on a show of power. It's saying "if you attack us, if you go to war with us, this is what you'll be hit with", all the while NOT actually hurting any of the opposing army. That bit is important. The Halidom are TRYING TO GET THE KINGDOM TO ATTACK FIRST. That way the Halidom can claim to be the victim, so they can declare war with the justification that they just defending themselves. The Halidom are big on appearing like the good guys.
Second's show of power is basically saying "do you really want to start a war with us? Really? 'cause this is what is waiting for you if you do. We can wipe out whole armies with little effort". So what if the Kingdom aren't allowed to attack the Halidom. They're not at war, and they're both currently on their own sides of the border. It's once the Halidom cross the border that the gloves come off. It's a warning and a show of power telling the Halidom to pull their heads in and keep away. To not try and take advantage of the Kingdom's impending civil war over the Crown. Cross the border and this is what awaits you.