before you go and save halsin, you actually can do kagha's quest to get the best possible outcome, where everyone is alive and well. this is how you do this.

make sure you saved arabella, then steal a letter from kagha's chest. the location from this letter is at the swamp area, i'll show the place on a map, it is a small island. there are monsters there - mephits and wood woads. here is my video on that fight


when monsters are dead you need to make a successful precision roll near the giant tree stomp, there is a hidden letter there! read the letter, then return to the druid grove and speak to kagha. in that dialog there is an opportunity to make her side with you after all.

the rest is simple. kill the shadow druids, enjoy remorseful kagha! everyone is alive, the ritual is stopped, tieflings can stay as long as needed! now you can start planning on stealing the totem for mol... but that's a talk for another day.