When I had to make the decision, I considered that (1) the players definitely do not accomplish their intent, and (2) the evil spirt owes them no compromise. So I looked through the list, and thought - the spirit
is bound to the spellbook, but takes it into a companion instead, namely Megloss, which only makes sense given that Megloss is Fea-bella's enemy (though one with whom some sort of rapprochement seemed to be developing) and the evil spirt sprang forth from Fea-bella's heart (when her attempt to cast a spell in the lair of a demon failed) and hence would have an affinity for Megloss in proportion to Fea-bella's aversion to him. A bolt of lightning blasting the house seemed a final, fitting capstone, a "freak event . . . at the conclusion of the ritual" that also dramatically framed the PCs into their loss, outside in the rain surrounded by charred tinder while Megloss stands above them sheltering in the surviving half of the house.
On a different day I might have made a different decision. And while I don't claim to be a fantasy author of the stature of JRRT, I think the process here is in the same neighbourhood as the one that you (
@AbdulAlhazred) impute to him.
A quite different mechanical approach to failed rituals is found in Rolemaster Companion III (p 27); here is the relevant portion of the chart:
49-40 - The ritual fails, and all present are blown back 20 ft. All take an "A" Impact critical and lose all spell points for a whole day.
39-30 - The ritual fails, and the casters are badly hurt. They taken an "E" Impact, others a "C". All persons lose all spell poitns for 1d10 days.
29-20 - The ritual fails. All participants take a "C" Impact crticial, lose spell points for 1d100 days, and are knocked out for 1d10 hours.
19-0 - The ritual is perverted The effects of this are up to the GM. Suggestions are given later in this section. In addition, all present take an "A" Electricity critical and lose all spell points for a whole day.
(-01)-(-20) - The ritual is perverted, and all present take a "C" Electricity and an "A" Impact critical. All participants are unable to cast spells for 1d10 days.
(-21)-(-40) - The ritual is perverted. All present take an "E" Electricity critical and a "C" Impact critical. All participants are unconscious for 1d10 hours and lose spell points for 1d10 months.
(-41)-(-100) - The ritual is perverted. All present take an "E" Electricity and an "E" Impact critical and must make an RR vs the level of the ritual or be deprived of all spell points permanently. All are unconscious for 1d10 days.
(-101)-(-200) - The ritual backfires in a spectacular manner, killing all involved instantly.
(-201)-(-300) - The ritual backfires in a blaze of arcane power. The spell effect will radiate out into a mile's radius, causing whatever effects the GM sees as necessary. The souls of all participants are ripped apart. They may be resurrected, but all mental stats will be halved.
(-300)-(-400) - The souls of all participants contribute their Essence to the power of the ritual. The spell effect will radiate for several miles, with a total effective level equal to: (ritual level) + 0.5 x (sum of participants' levels).
(-401) down - The release of arcane power has caused a breach in reality that will call for a god to repair it. The souls of all participants are totally annihilated, along with the surrounding few acres of land. The magical repercussions will be felt by all spell casters within a thousand miles.
The concept of "ritual perversion" actually requires similar GMing decision-making to Torchbearer (eg for summoning/possession rituals, the suggested options for perversion are "The caster may very well be possessed, or the summoned creature might be uncontrolled, or the caster may have called up something of much greater power than intended"). But the use of the chart otherwise permits the GM to disclaim decision-making.
One obvious upshot of the RM approach is to encourage attempts to use failed rituals, with hefty penalties to the roll, as an attempt to blow places up by getting a-401 down result; or just to lure enemies into participating and then killing them or sucking away their spell points by lesser failure results. This is a repeated experience with RM, where rules elements introduced in order to generate genre-appropriate results invite being used in other ways to produce genre inappropriate results, requiring either rules modification (we didn't use the ritual failure chart as written) or gentlemen's agreements (we had a few of those in place too).