These leaders will crumble. Too arrogant and complacent. Even the witch is shooting herself in the foot... she learned nothing from being called out by Victor. Stubbornness and pride will mete out their fall.
So my thoughts is the witch queen decided to break the neutrality because diablo took her real daughter first. Is it because of her power or is it because she has a lots of connections that will know the movements of the other factions.
God she needs to shut up what is she even in this meeting wit he's are only useful when not at war. if it's a open war would you tolerate a merchant that sells to your enemy? No, you wouldn't
the best way to punish the witches when the truth about their deals with the demons would be revealed would be to either take away their monopoly (super hard but not unrealistic) or better yet force them to sell all their products at a far lower price than what it cost to make them