Add to that the fact that Subaru was trying to escape the barrier in that episode. He wasn't sneaking around doing random stuff. He just wanted to leave. So instead of talking it out when you clearly have enough power to ask for surrender, you just start slaughtering them. Surrender is also different from discussion, just to make sure no one conflates the two.
Also Garfiel threatened and hunted down Otto just for knowing he lied about Subaru's predicament.
He is a selfish evil bastard. Just because you have reasons to do something evil doesn't mean you aren't evil.
Except they already had a discussion with him. If he had such deadly abilities, he would've use them at this point to kill everyone, or at the very least escape imprisonment much earlier than he had. It is nonsense to think that you just jump to imprisoning him or killing him without any discussion or negotiation when you know he is weak as shit.
The witch of greed did give him that right, but they don't know that. We know that as the audience, but they have no idea why Subaru is able to do it, not even Subaru himself. At that point, instead of knocking him out and jailing him, they should've questioned him to know more.