1- They are Muslim as long as they don’t proclaim Imam Ali (a) to be God. There are many types of Alawis. Not all of them worship Imam Ali. Those who do are not considered Muslim and they would not be pure.
2- They would be executed under very specific circumstances (such as a just government authorized by an infallible, then truth is very clear, they are given a chance to repent, and so on). Yes there is no compulsion in religion, meaning non-Muslims are not forced to convert. But for Muslims to cause such deviation and misguide others by claiming Imam Ali is God, such deviation must be stopped. It makes Imam Ali look bad and it might deter many people from following him. This causes grave damage.