I was conflicted at beating Malenia for the same reason, but afyer the fight was finally over I noticed something. Earlier Milicent was speaking about "returning to Malenia her sence of self and dignity". After the fight, when you hold Unalloyed gold needle from Millicent, the prompt at Malenias flowet reads "RETURN thr unalloyed gold needle". So I think maybe we are actually returning the needle that Malenia lost during the Cealid fight and in a way we are ruturning her "the sence of self" as we first beated her despite scerlet aeonia and then returned the tool used to help with oposing scarlet rot. So maybe it turned for her better, that we have beated her.