Not all demons that protect the villagers are good; some may merely keep them as potential food reserves.
Karma is the most direct standard to determine whether a being is evil.
Those entangled with karma are rarely virtuous individuals; most are utterly evil, with very few exceptions like the Supreme Ming River Sect Master.
The Blood Sea is the filthiest place in the world, yet within it lies a top-grade Innate Spiritual Treasure, the Karma Fire Red Lotus.
This treasure automatically absorbs the world's karma to enhance its own power, and naturally, the Ming River Sect Master, who possesses it, is shrouded in karma.
However, the Karma Fire Red Lotus can suppress fortune, so the Ming River Sect Master is not burdened by karma. This explains why he dared to plot against Red Cloud, attempting to seize the Foundation of Sanctum, the Hongmeng Purple Qi, from him.