In a way this is good for me personally, as I didn't want to have to recruit him.
On the other hand, some people might not like Halsin literally disappearing from the game after ostensible recruitment. For the record, I fully completed his quests and got to the "I'm here if you want me" spiel. Isobel is alive and well. I don't know what got to him, but he left my camp permanently the day I killed K. He has never joined the active 4 combat party for any period of time if it matters, and I haven't travelled to Baldur's Gate yet. I'm still in Act 2 as I noticed I forgot to kill the rat man.
I'm not sure if this is bugged or I missed some sort of flag or dialogue, I didn't send him away at least. I honestly couldn't remember what companions I need to not miss Act 3 content, there's so many small things in the game like Astarion and the +2 strength bonus. If I'm lucky he's mostly useless in Act 3 or comes back anyway.