Morales' return on The Walking Dead was literally short-lived when Daryl barged into the conversation between the old friend and Rick Grimes, so why bring the character back at all?
Morales may or may not have budged on his stance. Serving as a Savior having been rescued by the group after living in a tow truck and waiting for death, the Saviors found him and took him in. He has thrived since, taking advantage of the resources the Saviors have had to offer. Rick's pleading with Morales might have eventually revealed what a monster Negan is and helped influence a change in allegiance but Daryl cut any possibility of Morales becoming Team Family short by putting an arrow in his head.
"I know who it was," Daryl said. "Don't matter. Not one bit."
That was all the explanation Daryl gave for killing Morales, leaving many fans of the AMC series are wondering why he did it? Or why the series brought back the Juan Pareja character at all?
"He’s just got revenge on his mind this year," Daryl actor Norman Reedus told EW. "He’s ready to kill everybody, no matter what the group says, no matter what anybody says. He’s just like, ‘Nah, screw it. Everybody dies.’ He’s very focused on revenge."
The hunger for revenge is likely driven by the humiliating and torturous experiences Daryl was forced into by the group. Not only did Daryl witness Denise get an arrow through her eye in Season 6, but the later episodes in Season 7 would see him taken prisoner, fed dog food, and treated worse than any other living person on The Walking Dead at the hands of Negan and the Saviors. One might argue, aside from Maggie, Daryl has experienced the worst of what the Saviors are capable of and is taking no chances when they com face to face.
Aside from a possible feud between Rick and Daryl (as Rick makes efforts to preserve humanity while Daryl is eager to kill any and every potential enemy on his path), the moment might serve as a turning point for Rick. It appeared to be the instance in which he truly realized there might be another way to win this war other than killing every Savior. It's a feeling he already began to deal with when he realized he had killed Gracie's father moments prior.
As shown later in the same episode, Rick was ready to allow a Savior to live when he cooperated but Daryl elected to put him down, as well. It goes to show the lack of importance Daryl credits to the people when encountering members of the villainous group.
It doesn't matter who they are if they are the enemy.
At the same time, Jesus is rounding up Saviors and bringing them to the Hilltop. Certainly, fans are screaming at their television sets, wondering why one of their favorite characters could suddenly be making such a ridiculous decision. Some of those people are in the same crowd of those wondering why Daryl killed Morales and the young man at the end of the episode. Suddenly, The Walking Dead has mastered the crux of what is right and what is wrong in a way which not even the fans can firmly answer.
"I'm not right but that doesn't make me wrong," Morgan Jones said, masterfully recapping the entire series of events involving Rick, Daryl, Jesus, and Morgan.