I have less problem with the player taking the Ki-rin as a CR12 monster because it is the 'best'. It is no more that every druid being a T-rex since it is the best at the level, even though few druids would have seen one.
Maybe it’s time to start over from scratch with a new campaign, a clean slate, so that everyone gets a fresh start, you’re not dealing with hold-over weirdness from the previous DM, and nobody can complain about previous favoritism.
This was kind of my view as well. I've taken over a campaign before, and it's not easy. My very first campaign was taking over after our DM had to leave town (fortunately he gifted a lot of material to me first). It was a monty haul type campaign, already in the low 20s (1E), and the players had expectations on treasure. I tried to reign things in, but had to balance that with the player's demand. Starting my second campaign at level 1 was a huge relief.
Find a way to bring this campaign to a logical conclusion / climax quickly. Is this Balders Gate: Avernus? Have Zariel personally show up to take a look at this Ki-Rin thingy. She might decide to remove it from her domain via combat. Especially if it / its friends have been stomping intruding demon lords.
Win or lose the resulting climactic encounter, the current campaign ends. Start new (unless the group is too raw-nerves to hang out around each other) at L1 ... and some of the legends / mythos of the world is the mighty mortals who faced off against demon lords and archdevils, upending plans of Evil that had been laid over millenia.
I concur with the people who recommend giving this campaign a swift, epic end. Get those heroes across the finish line of victory, have a parade and a medal ceremony, and they all live happily ever after.
That cuts the baggage and allows you to move forward.
Next, if you wanted to continue DM-ing for the group, I would sit down and figure out some principles to govern my behavior. And I would scrupulously stick to them. Here are some of mine:
“No reasonable request should be unreasonably refused - and no unreasonable request will be considered.”
“If there is some ambiguity in play, and it is my fault for not being reasonably clear, I will resolve the ambiguity in the players’ favor.”
“I will only roll dice when I am not certain of what happens next and I will abide by the die roll. No die roll will be ‘softened’ or ‘hardened’ just because I want a different outcome. If I wanted a different outcome, I shouldn’t have rolled the dice.”
“The game works best when players make decisions and drive action. The game does not work when the characters are unwilling to go on adventures or seek fortune and glory. Characters that aren’t interested in adventuring are not playable and not allowed.”
“When PCs engage in hostilities with one another, they get to choose their opponent’s result. In other words, your character can throw a punch at my character, but my character chooses what happens as a result. And if my character casts a spell on your character, you say what happens as a result.”
“Play time is for play, not rules disputes. If I make a ruling, that stands until we discuss it some other time. Even if my ruling is wrong. We don’t stop the game to fight. It is wrong to steal time from the other players.”
“There is no game rule that solves a personal problem.”
These are a few I use to keep my game clean and fair. You might have different concerns and different rules. But starting with some principles and sticking with them can help you and your players with all kinds of issues.