Are there alternative outcomes for this alley scuffle?
It has been a while since I played Dishonored, but I remember this scenario, and also spent some time (20 ish attempts) trying to befriend some or all of these thugs. As far as I can tell it is not possible. It seems however you approach the situation, they become aggressive as soon as they know you're there.
I could be wrong of course, but I don't think theres any other way for this to play out