This one’s pretty simple. SRPG breaks if you kill everything, so that won’t be allowed. In a perfect, psychopathic world, you’d have the freedom to murder everyone, but that doesn’t seem particularly feasible in this case. This is similar to games like Skyrim or Fallout 3, where you can kill most people, but certain key NPCs (without whom the game is impossible to complete) are protected.
This might seem like an odd thing to mention, but it’s a design decision that doesn’t simply happen on its own. The default behavior is mirrored from the EAT (can’t eat anything by default) behavior: you can fight anyone by default, with restrictions on fighting certain characters. It will have consequences, however, based on the factions of the targets you choose.