Good thing the forged had 2 "safe" room to sleep in, else this entire fight would have been pointless as, the forged is a dead end and was empty except for a hammer no one can lift.
I don't think setting another free unto the world is a good idea but, the alternative would have been for the group to dodge Lilon lightning and potentially having to leave the remaining items behind.
So setting Lilon free is the best option and who knows may he isn't a bad dragon since, Yuki is blue, and he is bad.
I wonder why someone went through all this effort to hide these fancy gloves and if those people are friendly.