This is supposed to be part of a sort of turning point in Vilkas and Twlight's lives. In short, some shit happens earlier that night, Vilkas and Twilight almost get themselves killed and Twilight ends up killing this one guy. Non-human territories are rather violent, there's a different idea of what's considered a "legal" kill and what is actual murder. A fight is basically fair game, assuming both people are equally involved in it escalating into a death match. It's common place for the winner to claim a trophy from the fight. What happened in their situation, probably falls closer to self-defense anyway, and was considered fine. Vilkas is still freaked out a bit by it all, Twilight is being way too okay for someone who just killed and mutilated a guy while barely making in out alive herself.