That's what happened. The police do a cape crackdown and he gives himself up as Kickass to protect his son. He goes to jail, and while there, KA's friend tells Red Mist who KA's dad is, and he sends prison thugs to murder him.
At the end, Hit Girl tells Kick Ass that she has to leave NYC since the police will want her because she killed 8 people with a cop's gun (although I thought she had her own arsenal?) and it would be too difficult and emotional to explain to Morris Chestnut. I guess they did it because they realize if they had her go back to being Hit Girl or normal girl again, it would completely FUBAR any character development she had during the film.
This film would have been SOOOOO much better if they didn't waste time with that utterly ridiculous and ultimately disgusting Mean Girls plot, and used that time to develop the new Justice Forever characters and plot. I honestly thought the cheerleading segment was going to be the first 5 minutes of the movie, and was mortified to see it took up about 1/2 if not 2/3 of the film. Although there was one funny scene IMO where the Mean Girls try to initiate her at a sleepover and she gets virtually hypnotized by a Jonas Brothers video, and it's a cult-like "One Of Us. One Of Us." kind of thing. That was amusing IMO, but still not worth the subplot. I guess they added it for Robtard's enjoyment 😉
It was also odd to see Hit Girl letting these children compared to her (she calls herself precocious at various times in the film) bully her at the "party", when not only is she not the kind of person to take crap, but could easily have crippled every single one of them. But she got her vengeance in a far more disgusting manner.....