Falko Ernst, senior analyst for the International Crisis Group in Mexico, said the release of Ovidio Guzman set "a unsafe precedent" and sent a message that the state itself, including the army, could be blackmailed and was not in control.
But in a chilling demonstration of the Sinaloa cartel's destructive power, he was handed back following a ferocious battle in which the authorities were hopelessly outgunned by the gang.
Mexico's Secretary of Defence Alfonso Durazo said guard members came under fire from the house around 3.30pm as they were conducting patrols in the area.
The officers celebrated their success by taking mugshot photos of him.
Ray Donovan, the DEA special agent who spearheaded the 22-agency effort that led to Guzman's capture, told CNN in February that the Sinaloa cartel still supplies the vast majority of USA drug markets.
Ovidio was not one of the jailed Mexican drug lord's best-known sons - Ivan Archivaldo Guzman and Jesus Alfredo Guzman are known as "los Chapitos", or "the little Chapos", and are believed to now run their father's Sinaloa Cartel together with Ismael "El Mayo" Zambada. In 2012, the US Treasury added his name and that of his older sibling, Ivan, to its list of drug kingpins. This forced the government to conduct a prisoner swap, and they released Guzman Lopez in exchange for the soldiers and their families.
Cartel gunmen were reportedly driving around the city in trucks, with one armed with a mounted machine gun, while locals hid in supermarket aisles and took cover in the streets.
Drivers drove in reverse frantically to move away from the clashes. Continuous gunfire could be heard in the background of several of the videos.
It also said some inmates had escaped from the Aguaruto prison in Culiacan amid the chaos, but did not say how many.
He was considered the most "powerful drug trafficker in the world" by the Treasury Department and his criminal enterprise spanned continents and triggered bloodshed throughout his native Mexico. Critics had said the Mexican government's pledge to defeat the drug cartels was empty even before the Culiacan humiliation.
Local authorities are warning people to stay off the streets as the shootouts continue to ravage the city.
"They made the decision and I supported it", Lopez Obrador said.
"The capture of one criminal can not be worth more than the lives of people". You can't fight fire with fire.' As analysts warned that Mexicans will see the debacle as the government surrendering to organised crime, Mr Lopez Obrador insisted his security strategy hadn't failed.
On Thursday night, at least eight people were killed and more than 20 wounded when Mexican militarized police and National Guard were engaged by heavily armed gunmen. He admitted the plan to arrest Guzman was "badly planned".
"The task force acted too hastily".