Its not like Dizzy is uncompromising on the working with the demon thing, though I did press the issue right off the start in order to get it out of the way so we can start building up party trust. What she was implying to Shahazza was that she didn't care if she FOUGHT with the guards, but wasn't going to let her KILL the guards.
If Shahazza decided to fight the guards and knock them out or scare them away, it would improve relations with Dizzy. If killing was the only option for Shahazza, then there would be obvious evil tendencies in the future that would prevent them from working together anyways.
As for the issues with the guards/guard leader... it is obvious something is wrong, but to punish and kill the guards who may not be involved would be an evil way to go about it. All they are doing is listening to orders or being controlled.

(Dungeons & Dragons)
Rulebook featuring "high magic" options, including a host of new spells.