I noticed in past playthroughs that Orso always seems to win the duel even though (I think) it's supposed to be random who wins. So on my latest run through Neketaka I tried save scumming to see if Larro ever won without player intervention; he never did. I could believe that was intentional but on one run through the event I chose not to intervene when Orso tries to kill Larro and instead of Orso executing Larro, the outcome of the duel inexplicably reversed and Larro killed Orso instead.
I'm currently playing on the beta branch (currently the same as live I think) and as far as I can tell, this bug only occurs when Orso tries to kill Larro and you've previously convinced them to fight to first blood. If it is a duel to the death then Orso kills Larro as expected and if you distract Orso so that Larro wins (when they're only fighting to first blood) then Larro will correctly choose to spare Orso if you don't intervene.