Indeed,
Manwe's position was ordained by
Eru, in that Manwe could not know the heart of
Melkor, but only observe the heart of
Nienna was either true or truly deceived. What risks was Manwe free to take with the hearts of his family?
Manwe's choices were (1) forgive and restore freedom of each heart, (2) not forgive and continue punishment, (3) forgive partially via ongoing parole.
For option 1 to be error, Manwe would need to understand Manwe's role was to place a higher value on distrust (discord if you will). Yet it was discord that created the very circumstances of Melkor's rebellion.
If options 2 or 3, consider duration. What recidivist policies could ever guarantee the desired outcome? Among the singers of creation, was harmony not the highest desire?
And all of this in the context that Manwe's right to rule is entirely dependent upon Manwe being
like Eru. What would Eru do, if not grant Melkor the very freedom Eru already bestowed at creation? Was Eru's silence not the open canvas of choice?
In releasing Melkor, did Manwe actually execute option 2 or 3 upon himself as head
Valar? If so, justice is inevitable and Manwe would learn this lesson about Eru's world.