The reason for sparing Neo's life was quite simple, actually.
In case of a two-sided attack, the entire nation's safety would have been at risk, and coincidentally, Neo is good at safeguarding the borders of the entire nation all at once with his immense army.
Therefore, Ashtel spared his life in exchange for him ceasing his questionable actions and transforming into a civilized individual with sound moral principles.
And in case he doesn't obey this treaty, Ashtel will kill him.
Although Raji and Jin don't know where Neo went, they for sure know that he definitely has broken the treaty now.
This implies that Neo is openly mocking Ashtel's authority; his actions are akin to slapping Ashtel in the face.
And no one in the entire world alliance is daring enough to face an angry Ashtel Rex; that's why they are both panicking at this moment.
