does it count as a war crime to keep a bunch of civilians captive in a legitimate military target
Does it count as a war crime to have industrial complexes, which are valid military targets, in Luna cities where a lot of civilians could get hurt ?
A valid question, though I think there are still some distinctions.
Luna is not terraformed. The domes are the habitats for survival, and you cannot separate the industrial centers from the civilian areas. Hit the dome anywhere, and the whole environment cracks. Since the UEF had good reason to believe that the Tevs would not target Luna domes for their own interests, it's reasonable that they wouldn't just abandon one of their largest colonies for such a remote possibility.
As for Kostadin, the major difference is that they had knowingly and willingly turned their home into a superweapon with every intention to use it. Purposely leaving so little time to stop the extinction event means that taking extra measures to avoid collateral damage might not be possible. Further, the civilians were being forced to comply throughout--they weren't allowed to leave.
But the assassination of the Elder in the middle of legitimate diplomatic actions, and then framing the UEF for faking the whole thing--that's really disgusting to me. Beyond potentially necessary sacrifices, blatantly violating one of the most ancient and vital elements of diplomacy and laws of war out of fear that your relationship with your long-time allies is so bad that your new enemies might be better friends for them. God, I hope the Vasudans finally take a proactive stance in this conflict and counteract the worst parts of the GTA while supporting the UEF and good parts of the GTA--which they're in a unique position to do.