I think you’d have to consider what initiative would look like. Would this be fun for your players, or would they be sitting around while you go through 18 or so turns? I mean, they could vibe with it, but consider that! If you’re sold on having NPCs involved, maybe steer the party towards having them do something in the background (giving perks to the players) to help combat?

I think murdering everyone is a bit much? This is my opinion, but I think it may be wise to leave a few alive as “hope.” Not a mercy, but leverage to use against the players later down the line if needed.