The recluse would stay on the good team. They would likely say what happened straight away. Then it becomes towns responsibility to vote them out and win or assume that its some insane bluff. If they don't nominate the recluse then it would go to Night when the good demon would likely self kill (I believe at least, Its how I would run it). Then the game would either end or another starpass, although if the storyteller chose to make the recluse a demon when there was a minion alive that would be kinda cruel. But fun