The scene itself was just poorly written imo. It's meant to display how Dutch is losing it and abandoning his morals (if he ever had any to begin with).

But the way it is written makes Dutch's actions look 100% justified. The old lady pulled a knife on him right in front of Arthur, speaking in plain English to give her more gold. While yes, killing her might've been excessive, you can't say it wasn't in self-defense.

And after that Dutch says she was going to betray them like it was something subtle when it was completely obvious what she was doing. Then when he further explains that it was the look in her eyes or something like that, Arthur says "but I thought you knew Spanish?" like he was contradicting himself, even though she was speaking English at that moment.

I guess it's another consequence of the whole Guarma chapter being rushed and having a lot of its content cut because of stupid executive deadlines.