It really sucks for the Demon Lord's Army that their supposed Demon Lord (and probably the strongest Demon Lord of all time) is on a different side of this power struggle.
Well Seika after being betrayed in his past life is now following the 'My Own' way of life. He is kind of defying the world's imposition of 'roles' (even his power of onmyouji and jujutsu are already a rule-breaking powers) that even the imperial princess' clairvoyance cannot keep track of him properly (though this is still quite questionable since the princess might also be foreseeing the best results possible).
Anyway, I am guessing in the future, he might also have a real demon companion aside from the 2 human and elf companions he currently has.
He lost because he couldn't hurt his disciple. His kindness was the death of him and hence why he is desperately trying to not be kind. Which is also the wrong choice and will lead to his death.
Can't wait for the glorious scenes when his companions finally save him and grant him peace.