i don't think it was done out of kindness, i think it's because MC can't recover the body, and can't think of an excuse. since the body was probably mutilated/mutated by the mage in his experiments, it'd blow the cover that the city is making. but if they tell the old man that his wife died down there, then there'll be questions as to why they're burying her body/refusing to recover it, esp if MC saw her, and it was just a "thief den." and if MC makes any other excuse about her death, then the question would still be as to how he knew she died unless if he saw her body, and in that case, why didn't he bring her home. but i agree, i think it's so cruel to leave people wondering what happened to their loved ones.
where his morals at dawg. ik he was trying to be kind n shit, but surely anyone with a normal functioning brain would’ve told unc the truth. bro.