Condemnation would have meant the death penalty because "the wages of sin is death." Jesus provides us an example of righteous judgment under the terms of the New Covenant. First, let us consider who He is, so that we can see His authority. He is Immanuel—"God with us." If anybody understood the application and administration of the law of God for the church under the New Covenant, it was Jesus of Nazareth. In addition, He is not only Immanuel, He is also the Head of the church.
Why does He make this judgment? Under the terms of the New Covenant, the church is not a civil entity, meaning that it has no civil authority to carry out the death penalty. But does this mean that the law of God is done away? No. Romans 6:23 still says, "The wages of sin is death." Death for sin is merely delayed under the New Covenant. The sin and the death penalty are still there, but the church is in a peculiar position in relation to law. The law of God is not administered by the church as it was by Israel when they made the Old Covenant with God. Both covenants have the same laws, but different administrations.
Are adultery and lust (two sins involved in this episode) still sins under the New Covenant? Absolutely! So is the breaking of the other eight commandments. But the church, out of necessity, has to administer it differently. Forgiveness of this woman is implied, as Jesus, Immanuel, said that He did not condemn her. Even though it is not stated directly, He forgave her.
But did He say, "Go, and don't be concerned about committing adultery again"? Certainly not! As the Head of the church, He said, "Go, and don't break that law again!" He justified her in relation to this one law, and warned her, "Don't break it." His forgiveness did not do away with the law! It is ridiculous, on its face, to conclude that, when grace clears us and brings us into alignment with God and His laws, that it eliminates the law! Only when there is a clear statement or example in God's Word that a law has been put aside should we make such a determination.