Broken hearted and hurt over the rejection made Katsuki vulnerable enough for the Demon Lord to come back and take over Katsuki's body. He then shifts into his dragon form and kills everybody in the team except for Ochako and Shoto.

The worst part of it was that those two didn't even know that Katsuki was possessed. They thought that he was doing it in a jealous fit of rage and in the end, only after they killed him for the deaths of their friends, did they discover that he was possessed.