Sooo... this chuuni asshole is gonna get away with mass murder and psychologically and physically torturing MC and gang just because he lost his magic and was MC's friend before?
I give it credit. When possible to not kill, there are far worse things than death. Keeping him alive and imprisoned when he has lost his powers and will to fight is much better than just giving him a swift and easy death.
Death is only the needed option for people who could be a ongoing danger(a danger to leave alive), and/or to eliminate ongoing costs of keeping them alive. Death is also used when the person is meant to receive dignity as a human being, as a mercy.
Why kill off chuuni asshole, when he can be imprisoned in demon queen's basement and be used as a lab rat for training shadow ops(learn methods of torture). Or have spikes driven up his fingernails. Or live bound in a tiny cell below the outhouses next to the truck stop/spicy food stall, or below the victims outhouses. Giving the psychopath death for what he did, would be letting him off easy.
That said it was dumb for MC to completely not care about him not dying, and just walk away without comment(even just acknowledging to another character "I'm done with him, he's all yours" would've been fine)