With the mark of the skull on Grace's Chest, he was confident that even if she tries to betray him, he could just end her life with a snap of his fingers. But to be honest, he kind of liked her. Maybe because she was also a Villain or maybe because of her action right now. It seems as if she was trying to be on Xash's side.
Truly Grace wanted to defend Xash with whatever she has. She knew who he was, how he was the new elected leader of the Villain faction. And she knew how dangerous he is, so she wanted to be on the winning side. And besides that, she had another reason for joining Xash's side. She was hoping Xash could help her out at some time.