Paladins can intimidate the goblin kids to stop throwing rocks and release the bear. Halsin then attacks and you're forced to choose a side.
Maybe half the time I've played it, Halsin kills one of the goblin kids, making him a less sympathetic figure.
Heck, one time in EA I didn't side with him but helped him kill the goblins anyway. He remained hostile. After defending the grove, he still returned and during a scripted dialogue you have with him, I donated enough gold to turn him yellow again. Dunno about V1.3?
