The haunting past of Kohaku, possessed, killing their father and the demon slayers bred the fear that the controlled Kohaku would kill her comrades again.

In the final part of the nightmare, Sango was about to kill Kohaku. The saving grace came when Sango remembered Inuyasha stopping her in the same scenario in ep50 [That Unforgettable Face!].

Forget about it! It'd be better if we stay together! You're strong at fighting, see?

— ep30 [Tetsusaiga is Stolen! Showdown at Naraku's Castle!]