Everything Gaius did in 2.0 was off the record. He wasn't acting on orders - he took his Legion, went rogue, and tried to conquer Eorzea a second time. (First was before 1.0, when Midgardsormr's unforeseen intervention destroying the Agrius ruined his plans.) As a result everyone in the XIVth was given a kill on sight order by the Empire - and Nero just happens to be the sole surviving important member of the XIVth (because he was smart enough to cut tail and run when overpowered).
As for why the Eorzeans haven't expunged all the stragglers of the XIVth squatting on their lands? Dunno. It's never brought up. My personal opinion on the matter is that the Eorzeans pity them, so they leave them be so long as they don't stir up trouble.



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