Interogating and keeping prisoners in solitary is pretty much SOP for law enforcement. And with Fabletown, given their decidingly limited resources, was pretty much required.
I really think people are taking Bigby's Israel comment in 50 and trying to apply it retroactively to the entire series and that really don't work. Really, what he meant was 'Hit us and we'll hit you back harder and smarter'. 'Cause I really don't see Israel granting Hitler clemency anytime soon.