Thoughts on the scenario after completing "Hammers of Fate".

But please tell me, what the hell was he killing Nicholas for, only to then save Isabel from the clutches of Kha-Beleth?

The question is, of course, five years old. But, in my opinion, a correct answer never appeared in this thread. Well, better late than never.

Agrael killed Nicholas because he wanted to save Isabel in this way. Agrael knew that Kha-Beleth only needed Isabel, but he didn't know for what purpose. And Isabel was doing everything she could to help Nicholas, to get to the front lines of the battles, thereby becoming an easy target for demons. In the fourth mission of the first campaign, Agrael offered Isabel to escape. But she refused. Therefore, Agrael was forced to kill Nicholas. He also said: now everything will be much easier and much more difficult. Easier, because Isabel will no longer strive for Nicholas, exposing herself to the danger of falling into the hands of demons. More difficult, because the empire is now left without a king, and Isabel, learning that Agrael killed Nicholas, will hate him even more.