If you think about it, he is doing his job in keeping Lily placated. As long as he is nice to her, she won't attack anyone. It might not be the same method as just chopping off her head or otherwise killing her, but if his goal is to subjugate demons and prevent them from attacking civilians, then this might be the best method to work with her. And assuming she ever has children, she will teach them not to attack humans too.
He's playing the long game.