Attempting to keep things vague to avoid possible spoilers for Dragon Heist
During the first session, after the barfight, a couple monsters crawl out of the hole in the middle of the tavern, one big scary dude and three bugs. The 'Big Scary Dude' would be worth a ton of XP if killed by the players, but there are two caveats:
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It is at half health when introduced.
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The players are told in no uncertain terms to focus on the little bugs while an NPC takes care of it.
Before the players even have a chance at him, the NPC goes before them in the Initiative and outright kills the big scary dude with a four hit combo on his turn. The big dude goes down literally before they even have a chance to react.
Just the other day, one of my players was asking me if they should have gotten experience for being apart of that battle with the big dude. If they did, they would be undeniably level 2 for the rest of the first chapter, but my thoughts are that they did not actually do anything in that fight and therefore should not get the XP. Am I in the wrong for denying them the XP? Or am I in the right for maintaining continuity?
Best Answer
I personally feel Dragon Heist isn't optimized for using experience
Waterdeep: Dragon Heist seems to be designed with the milestone level system in mind, and it accordingly gives out roughly one level per chapter. If you've decided that players get experience for killing monsters, instead of levels for completing chapters, then you've already set yourself up for more problems down the road, because Dragon Heist does not have nearly enough combat encounters to get you to the required level for the later parts and you'll be forced to improvise extra experience for social encounters and traps.
So as far as the reasoning is concerned, no, they get no exp for it, because they never get exp for anything, they get a level when they complete a milestone.
But I've already decided to use experience!
Even then, they still shouldn't really get any experience for the big monster, because they weren't involved in fighting it. The NPC was in a fight with the giant monster, they were in a fight with the small things around him. Nothing they did contributed in any way to the fight with the big monster, and nothing the NPC did contributed to the fight with the little monsters.
For all intents and purposes, they were two separate encounters, and one of the encounters did not involve the players, they were essentially bystanders. If your player insists that they deserve experience because they were also there for the encounter, then logically speaking all other NPCs in the tavern were also there and should also share in the experience.