Spike had already lit the vampire on fire by the time Giles was gasping and pleading for his help. Spike could've easily given Giles a reassuring nod or a gesture to his lighter to indicate what he'd done. The vampire wasn't even facing him, and again, he'd already set his clothes on fire anyway. Instead, he casually lights a cigarette, feigns disinterest, and allows Giles to momentarily believe he's going to stand there idly and watch him die as Giles pleads for his help (Willow too - "What are you doing!? Help him!"). Spike then mocks and makes light of Giles straight after ("Oh poor Watcher. Did your life flash before your eyes?") which at best shows a disconcerting callousness and at worse some amusement in Giles' terror. None of that was necessary. He obviously got some kind of satisfaction out of allowing Giles to believe he was letting him die otherwise, what was the point?
I don't this is a radical interpretation. As I said previously, in the same two-parter Spike is smirking from ear to ear as he watches the biker gang break into a woman's house and you hear her shrieking in terror. Dawn glares at him disapprovingly as Spike admits "it looks like fun" so we already know it's still in his nature to get pleasure out of human terror. That's consistent with Spike's earlier behaviour with Giles.
Put this another way, imagine if it had been Buffy and Giles on patrol instead of Spike and Giles. The large vampire is throttling Giles and Buffy is unable to get him off Giles but she's secretly lit the vampire on fire. Giles is pleading and gasping "Buffy! Buffy!" Now, can you honestly tell me Buffy would allow Giles to believe she's ignoring him, turn her back to him, I don't know, check her finger nails, roll her eyes, or twirl her hair, and feign disinterest as Giles believes he's about to die? No way. It'd be entirely unnecessary and cruel and completely OOC.