What happens if Tamamo releases the First? A clash between two gods in full power, the galaxy would become cosmic dust, exactly what the First tried to avoid. If they could just fend her off, that would be enough for Tamamo, and Ilias wasn't acting herself, there was no need (yet) to lauch the First fury (their Nuclear Weapon). But don't worry, in the end, I will explain my vision of why Ilias didn't sue her god-like powers to finish their puny opponents, I just don't want to give far too much spoiler.
But it's clear the my vision about this is very different than of yours. I think the world must be fleshed with parties with interests and actions, and not just a bunch of apaty, being just a monster lord didn't want it, so humans kept their societies, their Ilias worship and their heroes. This isn't even about realism anymore, but for what is more engaging.
Thanks for the discussion, hope you stick around to see what is my vision of the game, but if not, thank you for your time.