Infernal prison is always temporary, but time might be whacky in the arena.
Hmm. Inferno is not death, so perhaps the commander ending up in inferno decides that he should go to the arena instead of sitting in an oven and being poked by devils. Then he is sent back by the demon lord (Mandaha), but he still dislikes the oven and the poking, so he comes back for some old fashioned fighting, but is once more sent down. Finally the Mandaha decides that the bugger is more annoying alive in inferno, than dead in the arena
Edit: some items makes you return from inferno quicker, but that is probably not the reason here. I'd say it is a bug more or less along the lines of my littel story.