Verse 21 sums up the hypothetical condition of a world without law and punishment. There would be nothing against which justice, or even mercy, could act. Justice and mercy would be meaningless.
However, “there is a law given, and a punishment affixed, and a repentance granted.” This is where Alma leaves the hypothetical argument and moves to explain how the plan of redemption has been implemented. The first important aspect of the plan is that there is a law, and a punishment. Those two things allow for repentance, as Alma had explained in his hypothetical case in previous verses.
This plan of life and redemption is so important that it is part of the essential nature of God. As a just God, if justice were removed from His character, He would cease to be God. This is the crux of Corianton’s issue. He apparently felt that mercy should triumph over justice. Alma declares that it was impossible for mercy to remove justice, for that would be the same as declaring that God was not just.
The plan reconciles justice and mercy, and replaces neither. The Atonement provides the way so that the problem of sin and death may be overcome. The resurrection defeats the barrier of death, while still allowing time for repentance. An atonement for sin provides repentance, which allows us to use the time of our probation to learn and develop characteristics more similar to God’s.
The two come together in a final judgment, where mortal deeds are restored to us, and we can be judged according to our works. Mercy allows us to improve; justice judges what we have become, not what we were.