It’s up to you
Hogwarts Legacy has many choices to make throughout the game, and a heap of them don’t matter, or don’t change much at all (or funnel into the same end result). Choosing to turn in or defend Sebastian at the end of his storyline actually does kind of matter, so listen closely to fully understand the options you have, and the results of your choice.
If you haven’t learned the three unforgivable curses yet, consider not turning him in/defending him
At a key point in Sebastian’s story, right near the end (after the level 28 quest In the Shadow of the Relic), his friend (and yours) Ominis Gaunt will suggest that Sebastian should be punished for his crimes. Your conversation with Ominis will determine Sebastian’s fate. You can turn him in (he’ll leave Hogwarts), or defend him and justify his actions (he will remain at Hogwarts).
Throughout Sebastian’s storyline, you’ll have the chance to learn the three unforgivable curses (Crucio, Imperio, Avada Kedavra). If you simply learn them as he offers to teach you them, you’ll have them forever. If you turn down any of the three curses, you’ll need Sebastian to teach them to you at the end of his storyline: meaning, if you want those curses to be part of your repertoire, you’ll want to defend him/not turn him in.
If you turn him in, he will be gone from the game for the rest of that save file
If you do choose to turn in Sebastian, he’ll immediately be expelled from Hogwarts, and will even be put up on charges by the Ministry of Magic. At this point, Sebastian will be missing from the story in all aspects: including the ending. You cannot interact with him further, and you can’t learn the unforgivable curses you may have missed.
Whatever decision you make is yours alone. If you already know the curses and think Sebastian should pay for his actions, you can turn him in. As of now we don’t know if any of this will factor into a sequel, or if there even is one in the works.
