if put bluntly, it's not within the scope. i could be wrong but the long answer:
i think it's because they already formed soul seal with different teachers for different sects, as we know nether and the other teachers are in amiable relationship cause they're all from tiny world. then possibly cause the demon lord's actually from glory city which makes it an internal problem, whereas the nether lord's protection is from external stuff(eg. demon beast hordes, the guy that demanded yuyan be handed over n fought nether lord, etc). might b why nether probably wont interfere in the fight between students here(demon lord aim to take something and maybe rule over instead of wiping glory city out of existence also a factor).
from hints of nether and the others' conversation, we can also assume their sects in draconic realm are under pressure from the sect where the guy demanding yuyan is from.. there r other matters to prioritize on than their disciple's scuffle, unless it gets really out of control then they probably wont directly interfere