"When I throw a dragon at my players, the dragon doesn't usually offer a way out. It is a battle to the death and if the players lose, they die."When I throw a dragon at my players, the dragon doesn't usually offer a way out. It is a battle to the death and if the players lose, they die. So in that respect, the dragon offering a way for the paladin to escape with his life is merciful (although a cruel act on the part of the dragon).
My party members were not able to escape either, so it is pretty similar. If my character would have been killed, then my party members would have died all the same. But the paladin was given an option to either save himself or die heroically... he decided to live. My character decided to die bravely without being given an ultimatum.
Two things tho about this case and dragons...
This was a dragon vs one, not a dragon vs party challenge as far as we can tell.
Second, while your dragons may be that simplistic, 5e gives them a bit more. Two of the bad ones, maybe green and black, get off on corruption - one of high class individuals, the other of institutions. They are not just engines of destruction but also of corruption and decay.
Now since (may have missed a post) this dragon color is not known, its entirely possible this was a green or black wanting to cause that paladin longer term internal conflict.
Or being intelligent and long term cunning, it could have bigger plans.
Point being the offer simply indicates there is more going 9n with this dragon than the casual rampage and kill, hopefully, so ascribing mercy to its motivations and actions is questionable.
It vould just be a black green type acting as the MM portrays
If I have the colors switched up, that's fine point still stands.