I did my best to work around this bug.
I too found it completely ridiculous that the Tieflings were so harsh on the person from whom they've been asking not only to convince the Druids to allow them to stay in the grove but also to go kill all those nasty goblins, but the issue is the endless-loop bug, not Larian's story design.
However, I just did all the Tieflings asked me to, I clicked to fully rest, found myself in my camp full of happy people, and guess what... The bloody guard still wants to attack me!
I really want to understand how this game breaking bug has not been prioritised over others. Or at least hear some sort of date this is expected to be fixed.
EDIT: Apologies, I hadn't realised this was referenced as part of the story decisions. While I did add my thoughts on it in the spoiler tag, feel free to move to the technical forum, as this is fully game breaking for me (if a thread for this doesn't already exist, let me know and I'll start a new one)