He's afraid of getting kicked out or in trouble. But eventhough he wasn't able to rescue Nakyum successfully, still he tried his best to prove that Nakyum is innocent.
Na-ah. He knows when SH learns the truth he will go on a rampage but he sees Nakyum's suffering more tolerable than Jihwa's punishment. It's ok for a poor painter boy to be raped, abused and humiliated but it's not ok for a noble to be punished for his crimes.
It is not that I am defending Mr. Kim's decision, but he is also in a tight situation. I am also frustrated/upset too when he wasn't able to fully stand to fight for Nakyum's innocence. It is hard to convince a mad man especially Seungho has the capacity to kill. It is a life and death situation. Even they want to speak up, their voices will remain unheard because Seungho's words are the law in that household. Remember the time that he tried to talk with Seungho, but he was told no one can open the door where he locked up Nakyum? The old man wants to help, but it is really saddening that due to his powerlessness he can't do that. I also pity him for convincing himself that Nakyum will be better. That will be his conscience that he needs to carry all the day of his life for not being able to tell the truth. He also tried to convince the other servant, but the servant doesn't want to speak up so how could he make a solid evidence that Nakyum is not trying to run away.
Jealousy, threat, and trust issue are definitely the reasons why everyone is in trouble.
Why, Mr. Kim, why? We all trusted you. ヽ(`Д´)ﾉ