I don't think the debate mattered nearly as much to the setting as it did to Jasnah specifically.
For Fen this was much more Kissinger-esqu Realpolitik. As soon as T-Odium put the "Who will you trade with" card on the table it was over.
Was Fen going to cause at best a civil war between the sides of Theylena who wanted what was economically right in a not starving next season kind of way, against those who want what is morally right in a not siding with the god of evil kind of way?
It could be argued in a utilitarian way that Fen made the right call. Theylena will be able to trade and by extension be able to feed their island nation in the medium to long term.
This wasn't a Lincoln-Douglas prepare your contentions and make a rational argument "Debate", this was a world dominating pseudo god that was coming to a small nation in time of war and saying "I will give you whatever terms you want". For Fen that is as good as it gets. Tarivangians sense of melodrama may have been Theylan City's only chance at long-term survival.
For the price of burning one friend, she got to dictate terms to a god. In the calculus of nations that's as good as it gets for a nation on the other side of a superpower.
For as Thucydides tells us “The strong do what they can and the weak suffer what they must”, and in the moment Jasnah was weak and had very little trade to offer and Fen was weak and was about to be locked out of trade in a trading country, but T-Odium was strong and had what Fen wanted. The conclusion would have been irrational any other way.