It is explained. Basically, because they couldn't eliminate him fair and square, everyone targeting him ganged up against Luo Li and he went crazy killing 50+ guys. This was setup from the school that realized he wouldn't join them and it would make their future having less prospects in attaining the leadership over 5 schools (after they racked consecutive wins they could use superiority for that goal). While this was normal, they abused their privilege in order to show it as crime for capital punishment, but that was prevented by Northern academy and reduced to exile without any benefits.
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