Luz DID understand that: after all, Luna was a highly established witch, probably the most well known one next to Willow. But Luz also understood if she let Luna go, she was free to go around hurting more people. She understood that wasn't her fault, that it was corruption, but unlike the monsters, Luna could think and act freely, and she was choosing to hurt others.

"Then I need you to agree not to hurt any more people Luna. They're innocents: they have no idea what's going on. You can't just go around hexing people like this."