They did not have to kill the squirrel [1]. First, rabies is extremely rare in squirrels and there are no documented cases of squirrel to human rabies transmission in the US ever.
Second, if a squirrel (or raccoon) does have rabies it will show symptoms within 10 days and die not too long after. The guy had the squirrel for seven years and had the raccoon for much longer than 10 days.
[1] https://nypost.com/2024/12/01/us-news/rabies-expert-says-nys...