After the cutscene we followed the path into the canyon. We were soon able to see the bandit camp.
Once we killed all the bandits, we headed down into the camp. The Bandit we were after was captured and hogtied. Soon after capturing your target, more enemies will began pouring into the canyon. After fighting the incoming bandits.
The leader we captured then offered us two options...
At this point you and your posse can honor your agreement with the chief, bringing the outlaw back to him to gain a reward and a boost to your Honor.
On the other hand, you can set the outlaw free, and everyone will gain a reward, but lose Honor. Vote with your posse to determine the outcome. My posse agreed to take the conman up on his offer, we had to swap his hat with that of a dead body nearby. We followed the outlaw for a short while, and he gave us the money. Then we followed the highlighted path back to the police chief to finish the mission with a short cutscene.