The mudman led Chen Zhao to his Cave of Ruins. He lived there alone.
The Cave of Ruins was in the middle of a swamp. Some lower level demons and creatures lived here.
Chen Zhao had seen records of Hellbugs in the demonic medical book. They were basically a type of parasite.
The previous Grim Reaper had experimented on humans and demons. Hellbugs could live on them. Hellbugs weren't fatal to demons, but they definitely were to humans.
Thankfully, there were no Hellbugs in the human world. The human world wasn't suitable for them either. Unless a Hellbug could find a host in the human world extremely quickly, they wouldn't be able to survive.
Because of the environment, even if one or two Hellbugs appeared in the human world, only one or two people would die. It wouldn't become a widespread disaster.
In Hell, having Hellbugs was a common illness, just like roundworms in humans back then.