To be fair - I never tested this under The Protectors so it may no longer be relevant.
But anyway: in the unmodded game, Daemon Heroes seem to be classified as being "good" creatures.
I've just had a game (and then done some tests) where an enemy Inquisitor was constantly doing just short of 40 damage to my Daemon Hero. As Inquisitors deal 40 damage and my Hero had only 5 resistance, it became immediately obvious that he wasn't doing do double damage he was supposed to.
I then used my Orc Hero who has just as bad resistance and put him against the Inquisitor - now the Inquisitor was constantly dealing just short of 80 damage to my Hero!
So yeah - bug! Unless Daemons are actually meant to be good and kind creatures?