Roy's Archon seems very well informed of how the lower sections of the mountain work. It seems to go with the position, and a lot of the knowledge seems to be infused into the creature (for example, the Archon being surprised that Roy's mom can guess his name).
Neutral can mean not much caring about the bigger picture, just staying "good" (by which in this context I mean loyal, supportive, etc.) to those closest to you, and to hell with strangers. In Henlein's Starship Troopers, there is a good point to be made that ethical thought has constantly grown to include ethic rules to deal with more and more diverse groups of people. From family, to tribe, to city, to country, etc. Paladins think that Good is defending humans and slaughtering goblins. We know that is unethical, because goblins should be considered individuals with ethics as well. Well, if Malack is stuck in the "tribe" level of ethical thought, he could easily be Good to the tribe while being Evil to those refusing to follow the strict rules. I.e. Neutral.
Could you back that up with some evidence? Not being sarcastic, I just can't remember of the top of my head what crimes we have heard being committed and which were punished by death. Seditious talking is the best I can recall.
I may just be misremembering, but we don't know how much Malack knows about the shadier part of the government. Like Roy tricking his party to go on side adventures, I picture Tarquin, knowing Malack is a bit on the neutral side, just hiding the operation of the squads of death-dealing ninjas. He lets Malack think that the courts, while oppressive, are just, and that the crimes that get dealt death are indeed to Malack's sensibilities, while taking care of other annoyances such as seditious talks outside of Malack's knowledge.
Grey Wolf