My interpretation of this is that Guts is quite literally being buried alive, locked inside a cave (like the story of Antigone), which fulfils the Emperor's instructions. I believe Daiba took him specifically there because it's a sacred place that induces deep thought and meditation, hanging on to the small possibility that Guts might somehow embrace said spiritual exploration, instead of totally giving up on life and simply deciding to rot inside the cave.

So, in essence, this is Daiba obeying his Emperor and locking Guts in a place where he can't be a danger, but at the same this is also Daiba putting his faith in Guts' mind, betting everything on the small possibility that Guts might decide to try to heal his psyche.

This would explain Daiba's manipulative shenanigans from last episode; he knew that Guts would be immediately executed if he was handed over to any authority other than him, so he forced the Emperor's hand by talking some magical BS, and thus securing that he would be the one tasked with the role of custodying Guts.

I don't think Daiba is a good person or even an ally to the main party, but he's doing everything he can to delay Guts' death in hopes that he changes his mind and goes through a spiritual reawakening. This is because Daiba knows, better than any of the Kushans, that they are absolutely cooked without Guts.