The seal of confession was instituted because the Sacrament of Confession is a refuge for sinners, where their confidentiality with God and with God alone is guaranteed. Without which, there is no place on earth for sinners to be set free with absolute confidence.
Although Jesus did not explicitly teach about the seal of confession, God in the Old Testament did establish refuge cities where those committed wrong were protected, and Luke and Matthew in referring to the coming calamities said that we must run from one city to another to escape, a clear reference to the refuge cities in the Old Testament.
The seal of confession is not a place for criminals to hide or to escape due punishment. However, without an absolute refuge before God, there may not be hope for any punishment or earthly justice.
While it is true that repentant sinners should want to hand themselves over to the law, but that is not the same as being handed over by God. Repentance is from the heart, whose freedom God guarantees. The priest in the confessional can strongly encourage the penitent to submit, but he cannot do what God would not do, nor even to make submitting to the authorities as a penance. That is up to the penitent. He will have to reckon with the ultimate judge in heaven.