There's no dispute that the Honor Code states Honor Duels are to the death, but it also seems there is justification for the idea mercy can be granted. That said, I personally believe the clarification should (in union with the previous Rule Clarifications of Honor Duels being both to the death and over matters of grave importance), elaborate on how mercy can be granted at an Honor Duel's conclusion, but that the ramifications of doing so are more akin to a grave form of multi-meaning insult at the loser's prowess, honor, and worthiness to be in the hunt. Something that should not be done lightly and is more akin to an insult directed at the loser and his clan, a potentially clan-feud leading act, then an act of peace.
What does this mean for this application? Not much in my view. Either way, I believe the answer of the applicant was still correct and appropriately accommodated for such an issue with both Honor Code and personal stance.
The council has been informed already as to the potential Honor Code situation revolving around Honor Duels and when/if mercy should ever be applied - from my talks with Nicboone we both seem to approve of the freedom to do so, but both disagree with the idea that it should be prevalent or a simple, lighthearted act. Just because you can doesn't mean you should.