Upon hearing that they would get a refund, the villagers were thrilled, lavishing all sorts of praise on Arrest Officer Zhao, just shy of hailing him as "long live the emperor."
What happened after that?
The book suggests, in a veiled manner, that after rousing his befuddled constables, Arrest Officer Zhao did indeed round up Fang Pan and that gang of impostor monks.
He was all in, knowing full well that there was no turning back. Therefore, he had to dispose of Fang Pan and his associates quickly to preclude any chance of Fang Pan leveraging his backers in court to escape punishment (it's almost a given that the more corrupt an official is, the more likely they have a powerful patron in court, although such relationships are merely transactional rather than genuine friendships).
Arrest Officer Zhao was well aware that if Fang Pan survived, it would be his own life on the line.
