Pardon that's set many loose! (7)
I believe the answer is:
amnesty
'pardon' is the definition.
(I know that pardon can be written as amnesty)
'set many loose' is the wordplay.
'loose' is an anagram indicator (letters are loosened from their original positions).
'set'+'many'='setmany'
'setmany' anagrammed gives 'AMNESTY'.
'that's' is the link.
(Other definitions for amnesty that I've seen before include "When law is suspended" , "Men stay (anag.)" , "suspension of law" , "A general pardon as for rebels (7)" , "International organisation concerned with human rights" .)