The military's reaction to Feng Yi's defeat was unexpected yet also within reason. Margaret was a mental ability user, and opinions on the outcome varied depending on who you asked. It wasn't that Feng Yi was incompetent, but rather he had faced with a counter-attacking opponent. In summary, this was the best excuse that the military could find for itself.
Although Feng Yi performed poorly in the later half of the game, the Diya alliance didn't view it that way. Instead, their evaluation of him was surprisingly high and nothing but praise. Even at the end, he never abandoned the fight, which magnified the alliance's excellent tradition of resisting to the death. As a result, the Diya alliance even awarded him with a Marhaf Resistance Medal.