2 Warrior, if it were that easy to turn a demon into a half-demon or something that isn't a demon at all, then no one would pay attention to demons, but they are feared. And if we are looking for logic in Agral's transformations, then he is simply IT, disguised as a demon, and "infected with demonic magic," and he was hiding his ears inside hollow horns; they are somehow unnatural (the horns), and his ears stick out at a 45-degree angle, as if pressed against them by the horns =)
And why he has demonic troops is completely unclear; in my opinion, his own people should have torn him to pieces, burned him, or even finished him off with a meteorite. He betrayed the main demon (Kha-Belekh), and he is leading his own people to their deaths (I don't think he treated them humanely after communicating with Tieru); after the mission with the tomb, they should have understood this. Although, of course, the behavior of troops in Heroes rarely lends itself to description.

They simply believe that he wants to take Kha-Belekh's place, and it is quite natural that they are waiting for the strongest to win, and Agral, by the way, is presented as the lord of demons. I don't think the issue is whether it is easy or not to turn into something that isn't a demon, but whether the demon wants to transform. I think demons don't want to turn into someone else; they are quite happy being demons—noble demons. Agral wanted to, and he did it. It's all about desire. Regarding the idea that he is just a disguised dark elf, I doubt it; I like Starhan's version more.