I think it's pretty well established that he doesn't personally have control of his actions in the avatar state, at least at that point in the story. He doesn't even know how it works. Thats a pretty major plot point. Combine that with him also being merged with the twin spirit of the one that was just killed, and justifying an argument of "but what about all those soldiers" really just falls flat.

I'd say the closest he came to killing of his own volition was when the sandbenders stole Appa... and he still didn't pull the trigger.

That was the moon spirit channeling through him. Different situation.

Externalities are a hell of a drug.

There are good reasons to not leaving Ozai alive that a child wouldn't factor in but an adult would. Namely a revanchistic coup against Zuko to reinstate either Ozai or Azula and restore the Fire Nation empire, while Azula was redeemable in theory Ozai wasn't, my source for that last bit being that he is voiced by Mark Hamill.

Point is that leaving him alive while idealistic and honestly pretty gnarly also leaves loose ends.