If you came across the term "malicious excitement" in a novel how would you interpret it?

It's pretty straight forward. I wouldn't say there's any interpreting to be done. Malicious means "evil" and excitement, well you know what excitement means. So, you tell me, what does it mean?

Enjoyable Evil

"Malicious" describes people with evil intentions or evil feelings. They WANT harm to come to someone else:

"As the prisoner was led to the gallows, the crowd of onlookers roared with malicious excitement."

Depends on what we know of the character to which it's referring.

as always context plays a role but to me it sounds like a step up from schadenfreude or perhaps schadenfreude with intent

Here are some possible interpretations

https://www.powerthesaurus.org/_phrase_thesaurus

Your so excited about things such as you dying

Someone getting dangerously excited or getting excited by something dangerous

PS can you give my friend some feedback on the intro to their story please?

www.wattpad.com/story/57929384-the-firm

usually precedes a murder or beating or something else violent.