Keep in mind that to a, lesser degree, Hraesvalgr is allowing Nidhogg to do what he's been doing. Nidhogg even states his goal if Hraesvalgr gives him his eye.

The most the Hraesvalgr can do/did is remain neutral and ask his brood to not join in on the fight.

Also Hidhogg has rancor and we know what rancor does to people