Kill him. In todays society it would be unimaginable. In middle ages, nobles could do ot.
In fantasy, where evil is known and tangible force, it is a good deed, prozecting the city. And Tim is noble.
If you decide to run, just go. We're high enough level (i.e. skilled/competent/dangerous) that common guards are very small threat
Remember that the group isn't all together. If Tim flees with Mani, he'll be leave only Breva and Vinccenzo to fend for themselves, assuming some of the foes don't
chase him. Breva and Tim could also try to find some 'real guards' to help them.
Now, there is a possibility that Akos and Tuck might become aware of the fight if it gets loud enough. The bakery was towards the north side of the district, which is the direction that the other PCs were taking Mani before being accosted. There is likely inner walls in between where the two sets of PC are, but they might be closer than either group knows. Still, at this point, it would one hell of a successful Listen check to have heard Castañon de Durgos' shouted threat (DC 35).
Once swords start clanging and there is more shouting, the chance of the other PCs hearing the battles drops to a DC of 30. Of course, Breva and Tim don't know that Akos and Tuck might be close enough to hear the coming fight. Assume that they believe they are on their own at this point.
Call it a hunch, but after 31 years of being a DM myself, guard "sergeants" wielding "vicious looking sabers" are rarely run-of-the-mill opponents. And the way he insulted the loyalists, shows me that his men are probably well-trained also. My instinct tells me we need to stick together, lol.
Note that only the leader is wielding a viscous looking saber. The other Rising Swords foes have more regular-looking longswords. Still, these foes are well equipped and should not be taken lightly.
Knightfall, what sort of armor are these guys wearing? And what shields are they using? Medium wooden shields, or large steel shields?
The leader is wearing a breastplate and using a large steel shield while four of the others are wearing chainmail and using light steel shields. Two others, a man and a woman, are wearing studded leather but have shortbows already unslung and ready to use (no shields). The last man is wearing what looks like a chain shirt under his Bluffside Elite tunic, wields a spiked club, and carries a light wooden shield. While Tim isn't sure about the last three, he certain the leader and the four others near the front all have daggers as well.
Note that Tim has seen enough Bluffside uniforms to know that either the uniforms the foes are wearing are either the real thing or very good imitations!
Note that a Knowledge (local) check might give the PCs an advantage when it comes to finding help, if they need it. Like with any big city, there are bound to be retired adventurers or soldiers living in Old City. Remember that the Rising Swords are
infamous mercenary group that is banned from Bluffside! For them to stride openly in the streets is both bold and quite arrogant!
They assume the people won't come to the aid of the PCs by shouting out for the real guards or helping the PCs fight them off. Of course, it is asking a lot for a bunch of untrained NPCs to help with this fight. The Rising Swords have a vicious reputation and won't hesitate to use the people against the PCs.
This is generally known about them. It's why there are wanted posters all over Bluffside for the heads of any members of the Rising Swords.
The bulk of the people will go from watching behind closed shutters and half-open doors to hiding under beds and in closets until the fight is over.
On his turn, I am going to have him give a ROAR and battle cry: "FOR THE HONOR OF HOUSE VALENCIA!" ... that should get people's attention! 
