It think this can all be explained by the usual logic of the Seanchan justice, so it's not atypical. Rebellion is a very serious and unforgivable crime to them (yet another "political wisdom" that emerged from having fought two long wars of Consolidation, which they apply to the third. aka The Return)

From the admitedly a bit cryptic comment in TGH, it seems the Watchersihave made the big mistake of telling Tuak, who was of direct Paendrag descent, that the Seanchan were impostors and not Hawkwing's heirs returning home, and perhaps most importantly, that in this context they refused to swear the Oaths of allegiance to the Empress

I can only assume Turak as the judiciary representative decided to punish only the leader of the cult for rebellion and to spare the cultists. Rebellion is always made a very impressive/gruesome example of, but in typical Seanchan fashion, Turak also wished to show the locals the Empire isn't bloodthirsty/cruel and the misguided beliefs could be forgiven if amended, so he had a new leader chosen to give the rest of the "cult" a chance to reconsider and swear allegiance. I guess he expected them to relent and swear the Oaths. It seems the cultists chose stupidly to martyr themselves instead, so Turak was not in a position to do anything but oblige them.

The other aspects is that the Seanchan put a lot of stock in prophecies and omens, and have never been forgiving of what they deem corrupt prophecies. They have not established an Imperial version of the KC by being too lenient with those

Unless the Seekers had gone much inland at that point (and it doesn't appear so) Turak probably didn't know how widespread and influent this "cult of the Return" might be. He could hardly let them spread ahead of the Seanchan the belief that they were impostor, all the more since this wasn't true.