Forget why they're allies, if the Republic is as aggressive and hostile as I'm assuming from skimming, why the fuck does the Kingdom even have anything to do with them in the first place?
This arc is just raw stupidity conjured forth from the author's darkest bowels to try and desperately keep this story somehow going.
They made a good case for how things appear to them; the previous one ran away from its duties, and then the Kingdom started pressuring them to allow their investigators into the country (and give them free rein to investigate, is implied); this is, in effect, (edit: the Kingdom) asking them (Edit: the Republic) to submit to an inferior diplomatic position, over their (Edit: the Kingdom's) own ambassador's fault, by casting the blame on the Republic without saying as such. Again, this is all from THEIR point of view, regardless of if it's correct or not. It really makes the general hostility towards Haru more understandable... especially since he WAS sent with the original intent that he arrive as a spy, not just filling in the shoes of the previous ambassador.
Editted for some clarification, since that has been bugging me how vaguely I initially worded it. Most seem to have understood the meaning, either way.