Leaving With Their Heads Down

Gregory looked at Klaus with disbelief in his eyes, yes, he recalled how Klaus managed to defeat him with a single attack. If Klaus had used this during their fight, then he would've won that battle as well. 

However, he could tell that this single attack took a lot from Klaus, not just that, but unlike the stipulations for this battle, he wouldn't necessarily give Klaus the chance to accumulate so much energy and would stop him from attacking with such power. 

It mainly depended on the stipulations stated by Lothar. From the onset, it was obvious Lothar was on their side, hence he gave such a stipulation that favored this. In a good sense, this was the same as Lothar giving them face, however, no one expected Gregory to still lose even after being given such a good opportunity. This showed how incompetent he was.