Medb is not all that bad either
She's a racist (against humans). She kidnapped the MC's father.
concerning the duel a negative response for killing Finnabair makes perfect sense imo, you can't really come with the intentions of preventing a war then kill someone on your first opportunity even if they did have it coming and expect people to accept your plea for peace when you do otherwise
I expect them to honor their own tradition. They
knew that Fin would have killed the MC if she won, but they didn't try to stop it from happening. MC honored their tradition with the kill. They're just salty because one of their own lost and made them look bad.
the only reason you even got the opportunity to even argue your case at all was because her father was polite enough to bring you to argue your case when he would have had no issue killing you immediately.
Again, tradition. Also, it would have been stupid to outright kill the son of the leader of your opposition when he's trying to extend an olive branch. It would have rallied the troops hardcore and there
would have been a war.
If you don't kill her, from a logical standpoint your plea for peace looks more genuine to them and from an emotional standpoint you avoid killing an elf right in front of her people and sowing even more negativity. In fact if you don't kill her, every action with the Alfar from that point forward is positive, with a bit of passive aggressive banter with Finnabair that leads to an eventual friendship with her, and Medb outright states that she honestly didn't believe in a possibility for a somewhat peaceful resolution but your actions convinced her otherwise so your actions there are a major factor in the decision. Hell if you show mercy after an unfortunate circumstance the king trains you for a bit and states that he was interested in getting a feel for you himself.
You can't choose to take antagonistic, provoking or an aggressive stance and expect the characters in story to respond passively or positively, if nothing else I think the fact that scenes play out very differently depending on character choice makes the game significantly better since actions do actually have consequences. Believe me I wanted to off Finnabair as well because of how overly aggressive she was but I let her go because it was counterproductive to the MC's intentions and i ended up liking the Elves you do speak to afterward, hell by the end I grew to like Finnabair despite how she started and I was kinda annoyed by how the chapter ended since there was some level of character growth that got wasted.
I expected them to have brains and not let some hot-headed bitch challenge the son of the leader of the Templars to a battle to the death KNOWING he knows nothing about your culture. They're either dumb or they were OK with provoking a war future. Hell,
CuntfaceMedb even acknowledges that war will end with their possible extinction but allows the duel? Fuck all of them. DEATH TO THE ELVES! GENOCIDE THE POINTY-EARED FUCKS! BURN THEIR HOMELAND TO THE GROUND! DESTROOOOOOOOOOOOYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYY
I'm sticking with my canon run of killing Fin and I hope I get the chance to wipe their entire species off the face of... whatever planet they're on.