Perhaps, but although it's never really been established, colonies are far apart, and separated by vast wastelands of dangerous animals and scientific anomalies. He is an actual exterminator as well, and it is his job to deal with those whenever somebody pays him. Because the Town Guard takes care of things like crime (if they can be arsed) and is very focused on cracking down on bandits and foreign invaders trying to get into their city.
Now, there's no way to tell any of this from the prompt itself, but most of everything/everyone The Exterminator kills lives in the town, or was trying to settle in town before The Exterminator killed them. Technically, he could be used as a political tool to maintain order, since the Town Guard only functions as a proper police force when it suits them/suits the plot.
But it is a trade city built by monopolistic aristocrats trying to keep everyone else down, a lot of what he does is for his (or someone else's) petty revenge and/or enjoyment. He's far more likely to be chasing beggars off the street and feeding their possessions to his dogs than he is to be chasing dissenters out of their alleyways and restoring a twisted sense of law and order.
He does create fear, enough that people drastically alter their lives to avoid him. But, it's not focussed, or 'goal oriented' fear that keeps people in line. It's just fear in general, vaguely aimed at people who can afford to hire him, but not in any exploitable sense.
And yeah, Leonard's a private detective, and the age old cliche is that you go there if you think your spouse is cheating on you, but sex is viewed very casually in this setting up until someone does something really befuckled in bed. Especially since by the nature of his profession, him having been a drug-addicted gladiator for steroid-narcotic trafficking rings, he's had to hang out in circles which are purely hedonistic, regardless of religion. Sex and love are mutually exclusive actions here, and for all he knew, she could've been a Dreggniate Pilgrim who finally found someone alone in a room.
Also no way to tell this from the prompt provided, but the Dreggniate scenario is particularly probable, since squid people are sort of looked down on/avoided as a marginalised minority, with other "Deformed" non-superpowered mutants and creatures. Squid Prostitutes, as it was established in the earlier short story, are half price for that very reason. Since his friend is very religious, he probably visits the church more now that he's sober. He's probably seen her, or people like her, playing instruments and singing.
Hell, sex-exclusivity in relationships is a weird, controversial thing in Dreggniate culture. Social contracts like marriage (Whether monogamous or poly) are practiced mainly by Kriva-Worshipping business owners, who have lineages and nepotism to play with. Dreggnion was purposefully introduced to the have-nots, who, would have familial obligations or sexual consequences due to the church employing children.
They would reproduce to join their armies, be their workforce, and generate meat and other physical blessings from Dreggnion the Flesh God. It's uncommon and odd for a soldier of the Town Guard to be married. The exclusive relationship probably sprouted out of a genuine love.
However, a Krivan Marriage that the Squid woman may not have fully understood (Or one that she may have come to recognize and resent) would be something an immasculated man would impose in a desperate bid for power and attachment, especially if he were of the largely Dreggnion-worshipping soldier class.
This is probably a useless tangent to get into, from a morality-exercise standpoint, but justifying a Hitman's existence as protective or destructive, and explaining why sex between two members of the proletariat is utterly innocuous, even to socially aware individuals, is very much an in-story thing.