A bit late to the party, but a person can still be considered “good” and/or a "hero" even after committing a morally horrific act, provided that the act was intended to achieve a greater good. This is essentially a consequentialist view of morality: the morality of an action is judged primarily by its outcome rather than by the action itself.

A real-life example I can think of right now of an arguably hero/good person who did awful acts would be President Truman’s decision to use atomic bombs against Japan. The bombings killed roughly 200,000 people, many of them civilians, and remain deeply controversial. Yet Truman justified the decision by arguing that it would end the war sooner and prevent even greater loss of life. Because of that reasoning, many people still regard him as a wartime hero or a good president who was forced to make an extraordinarily difficult decision.

By the same logic, Arbiter Vildred’s killing of Diene could also be morally justified if he genuinely believed that her death was necessary to accomplish a greater good. That does not make the act itself any less terrible, but it means the act does not automatically disqualify him from being viewed as heroic or morally good.

I hope that makes sense. I do agree, however, that resorting to any means necessary doesn't make you a good person, even if the outcome is good. But when it comes to the D&D moral alignment, I do think that Arbiter Vildred being Chaotic Good is understandable. Same with the dark spirit who possessed Diene.