The bank robbers guarded the hostages.
Can "guarded" be used in a context like this to mean "prevented the hostages from escaping" or can it only be used to mean "protected someone"?
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Sign up to join this communityGuard is usually used in the sense of displaying protection from/against something. But yes it can also be used to mean to watch over someone from escaping (like in your case, the hostages). So in this case, your sentence would be alright.
guard - watch over (someone) to prevent them from escaping. Source
This is a possible sentence, and the context would suggest it means "prevented from escaping". For example prison guards prevent prisoners from escaping.
It is a rather unusual context, and I'd be surprised if a learner actually found themselves in a situation in which this was a natural thing to say.