The people were unharmed. The fire, on the other hand, presumably caused a lot of other damage or harm. So "harmless" or harmlessly" cannot be used: they mean "without causing harm", adjectivally or adverbially.
Here "escaped" is a copula verb, grammatically, and "unharmed" is a predicate adjective acting as subjective complement. Or perhaps some other structure can be devised to explain this sentence. But in the end it's a common idiom, based on the logic above.
Options would be 'unscathed'* (maybe only Br English), or an adjectival phrase such as 'without being injured'. If you are injured but you can walk we still use the old war-time category 'the walking wounded'. And if someone's totally untouched, s/he emerges 'without a hair out of place'. (Sorry if this is too much info.)
*PS Don't go looking for the positive: 'scathed' - like 'kempt' and 'gruntled' - hasn't been used commonly for centuries.
Last edited by BobK; 04-Feb-2009 at 13:21.
Reason: Added PS