When Macaque dies the first time, and is resurrected by LBD in exchange for freeing her, I have realized that we have been deceived with the times. When Macaque is resurrected, LBD looks exactly the same as in the "Time to be Warriors" flashback. I may be rambling on this, but to me that means LBD was still alive or "working for heaven" when she resurrected Macaque, and since LDB was never killed or taken to the "underworld", she was sealed by the Monk.
I believe that when she was planning her usurpation in Heaven to bring about an apocalypse in the mortal world, she predicted her defeat and confinement. It makes sense, since she had a vision of destroying the world using MK (who didn't exist yet), she knew that the first time she would fail, but she also knew that she would survive long enough to try a second time, and this time she might succeed.
It is clear that the vision didn't give her many details or information, so she had to improvise between the lines, since she had no idea that, if she was sealed, DBK would release her in the future.
So she tried to "build" her escape plan with Macaque, although Macaque ignored her plan when it was time to free her.
My point is that we can have some affirmations with this:
1) When Wukong and Macaque fought, LBD, JTTW's first generation gang, were alive and active.
2) LBD knew that she would be sealed so she created the key, but she didn't know when or how she would be released.
3) She tried to use Macaque as she needed strong but controllable "champions" for her plan.
4) She attempted to usurp Heaven and cause apocalypse in the mortal world, but was stopped by JTTW's first generation gang (traumatizing Wukong in the process).
5) It was the monk who proposed to seal her, since for better or for worse, her main motive was the future well-being of innocent mortals.
6) Macaque didn´t keep his promise to free her, he threw away the key, and went on with his life.
And that's it!
This doesn't explain if it was her who killed him, and made him believe that Wukong killed him, or it was Wukong who killed Macaque, or if it was another "person"...
I guess the topic will be more explored more in the future, hopefully in season 4.
Thanks for reading.