You realize this isn't real life and that these aren't real people right? The knife on the dick might be rather unique but ignoring that one specific the scene dynamic is a pretty common anime trope. It seems like you're the one who isn't getting it if you're getting upset that a fictional character didn't react the way you would. He's lived a hard life where he's had little value and it takes more than personal danger to elicit a response. He's a protective person so he instead responds to his friends being in danger, same with his childhood friend before the game started.
Besides that, not that I've any first hand experience with this but I don't think it'd be a good idea to antagonize someone who's got a knife to your dick. Since the MC was not just able to easily diffuse the situation without losing any body parts but also get his sister on his side it really wouldn't do him any good to turn around and make an enemy of her.
Like you're response is entirely emotional ignoring the politics as well as the MC's personal vulnerability. Acting out the way you're expecting would put him at a major disadvantage with pretty much everyone he depends on. He's not in a position to hold people accountable, and not antagonizing these people doesn't just keep him secure but advances his own interest as well.
