Is Lady Smallwood actually willing to just let Sherlock go? But mycroft doesn't agree because Sherlock murdered someone therefore must be punished whatsoever?
She merely said
I don't think she was suggesting to just let him go. Quite the opposite really. I think she wanted him to be detained in some sort of prison, she just didn't think he needed to die.
Earlier in the episode Mycroft told Sherlock about an assignment that would end with him dead in 6 months. At the plane, as they are saying their goodbyes, John asks Sherlock how long the assignment will take.
He was being sent, at Mycroft's suggestion, to his death until