That makes plenty of sense in the whole "they are some sort of fey predator with completely alien morality" angle: the "adopted" demon knows that another family is angry because it killed their child during the battle; it understands this as having destroyed a possession of theirs, and views the situation as a threatening community figure having a grudge over property destruction which could endanger the demon; it attempts to smooth this conflict over by replacing the child with another, not understanding the social ties involved, and kills that child's parents to stop them from seeking revenge for this.

It's an alien, might-makes-right sort of morality where the demon, finding itself in a subordinate role, tries to placate threats because its entire social framework revolves around dealing out casual violence when possible and trying to avoid suffering the same.