I feel like there might be interesting ways to deal with it. Perhaps the mass killing of neutrals only ever happened the first time, which could have been many generations ago and under singular circumstances. Since then, only the odd one here or there ever dies during the purge. Perhaps it’s been decades or centuries since anyone died to the purge, reinforcing belief in it’s effectiveness as a basis for a pure society. It may have been so long that people wonder whether the purge is even real, or just a traditional ceremony carried out annually based on old myths. Then one year, it wipes out half the city. The party investigates?
The ritual could have been real, but was quietly faked so that a corrupt leader could avoid facing their fate.
Or, the ritual was always fake but used as a cover to assassinate specific targets without consequences.