While I will acknowledge the decay of them as an active threat, due to a mixture of the story functionally telling them that we & our friends need to be kept alive, and the fact that their top people need to have actual superpowers and legendary/ultra beasts pokemon to remain a visible threat. I will say Madame X not killing us was probably because before she was acting under the assumption that we were one of the lights that Melia is. This no longer the case with her identifying us as the interceptor and just walking away with just letting us know that. I have interpreted that and her lack of attempts to kill us since Blacksteeple might be due to the fact that with her current powers she might not think she's able to. She also probably doesn't want to trigger an interceptor awakening with her victory being what gets shut down. Also if you cheese her in Blackstepple, her losing dialogue implies that she's working for someone.
