Without more information, I would assume that "their own good pleasure" has a negative connotation in this sentence.
I assume this based on the use of the word infidel, which is almost always negative.
Thus, I would read the original sentence as:
With a few exceptions, the inhabitants of this city were Christians.
The infidels were in possession of the citadel, however, and treated
the rest of the population according to however the infidels wanted to.
And being infidels, as elucidated above, I would assume that the treatment had been negative.
However, I suspect that the original piece of writing is a case of history being written by the victors or at least being "colored" by the victors as "infidels" is usually a very strong word precisely because of its negative implications.
My point is that perhaps people had not been treated as poorly as we're led to believe, but without more first-hand information and further research, we may never know.
And as an aside, it may help to post the original source material in the future so that people may better understand the context.