It feels like this whole scene has a bunch of people making decisions that don’t really make sense.
1) Wizard Guy (who... isn’t a knight and is apparently just some random dude?) was wandering around town looking for secret monsters to fight, I guess? And he’s ready to attack people based on just suspicion. Okay, sure. He’s crazy. Got it.
2) Vampire, in being found out as a vampire, decides “Alright, time to fight this dude in broad daylight in the middle of a busy street.” And not, you know, run. Or teleport out? Which is an established Thing they have access to?
3) Crazy Wizard immediately busts out the super-evil-sounding Abyssal Magic. Okay, that’s obviously the Plot Hook this scene was made for, but did we really need that right now on top of everything else going on?
4) Suddenly, monsters! Big ones! In the middle of town! A bunch of them! Somehow!