Michael could have destroyed the settlement alone, but he didn't do that. He wished for his subjects to gain experience, some energy influxes, and maybe break through one of their bottlenecks mid-battle against the Lords of the Blaze household. And thus Michael let them fight the Awakened and army of the Blaze Lords without intervening too much.
All he did was search the Blaze Lord and his people when the battle erupted. He found them doing the deed – just like Mika had predicted. It was a bit confusing seeing orgy through his Spirit Eyes' energy vision, but it played into his cards fairly well. First, he erupted a barrier around the building, blocking the vibrations and sounds from the outside. Extraction devoured the vibrations and sounds. It wasn't perfect, but it was enough for distracted Lords and Awakened to keep their focus on their…partners.