If he does have another episode and he attacks or kills another person then it will already be far too little too late. Locking him up or keeping him under monitored treatment in this case is a preventative measure.
It's obvious that the Canadian justice system is quite clearly treating him like he's cured and that all is well. Once the justice system discharged him all the checks and balances that once existed for him (from a legal perspective, at least) disappeared the moment he was granted an absolute discharge. Li was undiagnosed before he killed McLean, meaning he has never had to voluntarily stick to a treatment plan.
There is now no legal recourse if he stops taking his medication or seeing his psychiatrist, which is unconscionable for many of those affected by Li's actions, including McLean's family.
Sure locking him up in prison is not the correct course of action but at the same time we must remember that he is being treated - not cured! Which means there is always the potential of his "masked man" coming back. Li listened to what he had to say before resulting in him killing and eating the face of an innocent man; the system should make it harder for that to happen again.