I feel like people underestimate the impact Ali's death had on Sang Woo, and more generally the later's personality. We were all devastated by the events of episode 6 and we put our anger on Sang Woo, but we didn't stop to see, really see his reaction to it.
But let's go back to the first game and how Sang Woo's boundaries shifted with each episode.
Game 1: Red light Green light
During that game, there was no actual player-on-player killing, people's survival depended on their own skills, their own actions, or lack of. At this stage, Sang Woo is as shocked as everyone else and he seems to have the same moral standards as Gi Hun (who is set as the show's moral compass, just by the simple fact that he's the one we're following). He helps Gi Hun by giving him some advice and telling him to get up. He wants Gi Hun to survive at this point.
He also is the one who suggests they all stop the game.
Game 2: Dalgona
At this point, everyone is back with the full knowledge of what the game is about. Sang Woo just tried to kill himself in the bathtub because to him it was the only solution left. I believe that, for someone like him who is smart and bears the pressure of his reputation as the Pride of Ssangmun-dong (see how uncomfortable he is when Gi Hun keeps praising him), the humiliation was too much for him to bear.
So when they restarted the game, he was set to win. And that's why he didn't tell Gi Hun about the second game. He did look conflicted when he saw him go for the umbrella, but he reigned himself in. Better have Gi Hun die early in the game than have him suffer all the way to who knows what level just for him to die anyway. I don't think he believed Gi Hun was smart or strong enough to finish or win the game, so he wanted him to have a quick death. In his arrogant mind, he may even have seen it as a mercy to his old friend.
Game 4: Marbles
I think the reasons he chose Ali was because it was the safest choice for him. Ali was strong and obedient, so he would be a great tool and would listen to him. He was also the most trustworthy person in the game, so he wouldn't have to focus on a potential betrayal from him.
When Ali starts calling him after he realizes he tricked him, Sang Woo stops right before walking through the door. This is an important symbol, because once he's past the door, it's officially over for Ali, and I think part of him just couldn't take that final step while Ali was still alive, because it meant actively killing him, which is something he yet wasn't ready to do. So he waited until the guard killed Ali, until he heard the voice announcing his death before moving on.
They don't show us Ali's death, but rather Sang Woo's reaction to it. He doesn't seem cold or happy, he really looks like he's impacted by this, and it is the same shot they used for Gi Hun and Sae Byok, the 3 of them walking away while their friend gets killed.
This is when we see a radical change in his behavior. I believe that this game was what made him go to the other side emotionally. He had tricked and get the nicest, kindest and most naive person in the game killed. There wasn't much he wouldn't do at this point of no return.
Game 5: The Glass Tile Game
This game is where everyone's inhibitions fell off. We are closer to the end and people are getting desperate. Several people are killing each other, dropping bodies in order to advance.
At this point, Sang Woo has tried to 'mercy kill' his hyung (remember this title that Ali gives Sang Woo and that the later gives Gi Hun is a mark of respect for older people, like calling them 'Big brother') and he killed Ali, so the 2 people who are the closest to him in the game.
So why should he care about killing someone he doesn't know? Someone who, in his mind, would do the exact same thing in his shoes? The old man had kept precious information to himself which resulted in the death of others, which is the same way of thinking that had driven Sang Woo until the Marble game. The old man probably thought that withholding information that resulted in death wasn't actually killing, just like Sang Woo had done in the Dalgona game. Besides, there was 1 set of tiles left and it was either the old guy or him. He knew Sae Byeok wouldn't do it. Gi Hun probably would at some point, but there was no time left. So at this point, killing him was what made the more sense.
I liked that he was not hypocrite about his actions, and I understand why Gi Hun and his high morals rubbed him the wrong way. In his mind, Gi Hun (along with the guy who killed his wife) were both hypocrites for trying to appear all righteous and make people like him feel bad. They had all come back to win the game, and to do that, everyone else had to die. At least he had the courage to say it.
(Look how he can't really turn around to face Gi Hun here, he knows that what he did there is unforgivable.)
Game 6: Squid Game
I think this was Sang Woo's worst case scenario: to end up in a 1 to 1 with Gi Hun. He was the only one who knew him, he was his hyung, his childhood friend, the proud big brother. But at this point, he was too far gone, he couldn't go back, he had to go all the way, so it would mean something. So that every horrible thing he had done would not have been for nothing. And if the ultimate price was to sacrifice his friend, then so be it.
But in the end, when Gi Hun offered to stop the game, I think he went back to his former self, like he was propelled out of his deadly spiral.
Seeing Gi Hun try to save him, him, after all of this, made him realize that the best solution would be to let him win. Because he knew Gi Hun would take care of his mom if he asked.
"I'm sorry Hyung." he said.
So yeah, Sang Woo did terrible things, but I don't think he was a monster, or cold blooded and unfeeling.
Nobody can tell what their reactions would be in a setting like that, and I think his character was the best written of all.
