I have the same issue. But i decided not to take malady's help and now i'm stuck with her thinking that i'm going to be his thrall. I am running a lone wolf party, archer/2hwarrior with Lohse and Red Prince, Loshe being my avatar. However i managed to kill the demon before he could act due to me having about 47 intiative and basically killing him in the first round. I thought i would go back to Malady and say "ha, rekt him without your help" but she still thinks he's alive