It wasn't just the ball of scarlet water that burned in the end, it was also the demon that started burning.
Once the beam of light purified the entire ball of scarlet water, the beam of light slammed right into the demon himself.
It only hit the demon's hands that were pushing the ball of scarlet water down at first, but that alone was enough to make smoke come from the demon's body.
With the way that the demon wanted to pull away, it seemed like it was being hurt by the light of the lamp. Only, it was impossible for the demon to pull away faster than the light of the lamp could hit it.
That was unless it could move at the speed of light and that wasn't possible even if it had reached the Human Immortal Realm.
All that the demon could do in the end was turn out of the way of the beam of light, but that meant that half of it was still hit by the beam of light.