Alignments of the stick

[SinsI]

He didn't bully criminals, but people who were thrown to jail in a LE tyranny. Except for Thog (and of course Belkar), none of the people whom we have seen in jail was a proven bad guy.

He is scaring criminals OUTSIDE the prison, it doesn't really matter how guilty the ones inside are.

You forgot to mention that he killed a guard shortly after that in an extremely gross and abominable manner, without any "Good" second thoughts. Just because said guard made fun of him. What a jolly fellow, that Belkar.

Did he really? He force-fed him Eviscerstus's intestines, we don't know if he killed him afterward. And the guard is Evil and poses a danger to him, so it is not Evil to kill him. If being subjected to such an act by Belkar causes him to second think his occupation, is it not a Good thing?

Further, having second thoughts on killing a person isn't a good action any more than deciding not to kill your neighbors pet rotwiler for no reason. It isn't good not to kill someone, it just isn't evil. The definition of neutral. And no, every action an evil character makes isn't evil. In fact, the vast majority of actions anyone makes are neutral. Eating soup? Neutral. Putting on pants? Neutral. Not killing the guy who brings you your soup and pants? Neutral.

Not killing/having second thoughts on killing the guy that is trying to kill you is unambiguously a Good act.