Knight is apparently under the delusion that they can control the bugs, and wipe out the ones that don't behave. Needless to say, this is going to all come crashing down. And Chicago will probably be ground zero for it. Again.
Yes, yes it is. And it WILL end badly, mark my words. The best we can hope for is that someone kills Knight, and when the other two partners find out what's going on, they will sanitize everyone connected with the project with extreme prejudice.