The Xu Family did get some news about the fight at Wu Ling County when Lu Li went back. That being said, the Yu Family and the Bai Family deliberately covered up some information so what the Xu Family acquired was not the whole picture.
Truth being told, many found it ridiculous that Lu Li could kill Yu Yang with one move. If in this world, a warrior of the Spirit Sea Realm really could kill a warrior at the peak of the Fate Wheel Realm, then the entire cultivation system of the world would have to be redefined.
Many people believed that Yu Yang's Fate Wheel was not cracked by Lu Li according to that day's situation. Somebody else had secretly attacked the Fate Wheel which led to Yu Yang fainting. Lu Li was only killing a wounded tiger.