Bone Collector + Fang Gu + Scarlet Woman interaction (2 living demons)

In one of the resent games we almost had this situation:

Setup (16 players):

Fang Gu + Evil Bone Collector + scarlet woman and some outsiders

Events:

1. Fang Gu is executed and dies day one.

2. Scarlet woman becomes new Fang Gu

3. Night 2 bone collectors selects dead Fang Gu to regain ability, Fang Gu selects an outsider.

4. Outsider becomes new second living Fang Gu.

We have 2 living demons in town, and seems like by rules I as storyteller cannot do anything with this to balance it out.

My idea is to rule it this way:
By the Fan Gu - scarlet woman jinx:

"If there would be two Demons, one of which was the Scarlet Woman, the Scarlet Woman remains the Scarlet Woman."

May be I can return Scarlet woman (second Fan Gu) back to the scarlet woman. Thou this is not explicitly the wording of the jinx, but I think as a general rule of thumb there shouldn't be 2 living demons and that's ok.

Any thoughts?