Everyone ultimately did not flee.
After all, if they were to run away, who knows what might happen next.
At least from the perspective of the half-elves, the people of The Azure Longsword were fleeing because they had committed murder, and as for why they killed, there were, of course, many excuses that could be fabricated, especially when the murderers had already fled.
As for Sigrdrifa's suggestion, it was naturally ignored by everyone. In the end, it was Medea who managed to control the rioting crowd by shooting out a great number of Mind Lines.
Afterwards, the relieved public security officers invited the members of The Azure Longsword to the Royal Court for tea,
Incidentally discussing the investigation of the murder case.