Joseph is restricted by the feudal laws.
You have to remember they were in foreign lands, technically, and what they did can trigger a war.
The punishments are to prevent a war by showing that those involved were acting on their own and punished for it.
He did the morally right thing, but legally he broke the laws and needs to be punished for it.
It's bs politics, but that's the situation.
I don't think he is just fully healed.
I think he is STRONGER.
He stays in that cat form for reason, even after being fully healed.
He has found a cheat to get stronger. He has hinted as such in the past. That he found a new way to use his power.