Pinliang wasn't afraid of a beating, but Xiaofu was. One slap from Lin Yi would kill him.
Lin Yi pocketed the thousand Kuai-he didn't care about it at all. He'd just wanted to piss pinliang off a little, and make him drop a rock on his own foot. He'd also be able to cover up his loss, in case pinliang tried to force Mengyao to abdicate again.
Lin Yi took the money and left, and while pinliang was cursing Lin Yi for being a coward in his heart, he didn't dare say it out loud in public. If he did, the students watching from below might come up with some nasty words for him!
After all, everyone saw that pinliang had lost, and it was only natural for Lin Yi to reject his challenge. In their eyes, it was pinliang's shameless behavior, and so even the slightest bit of dissatisfaction would be seen as a sore loser by the students.