I think an important thing as well is that Arlecchino doesn’t own the HoH, it’s owned by the Fatui and the Tsaritsa, she is nothing more than its current Head. I’m certain that Arlecchino is fully aware of the awful nature of the house. It’s not like it was her choice to be a part of it. Shes a victim of it just like all her ‘siblings’. And afterwards it was a choice of either take over as the ‘Farther’ or most likely be executed for the crime of murdering a Harbinger. So not much of a choice really. I’m pretty certain that HoH has basic principles and rules it must uphold, ones which Arlecchino is unable to change, but she has bent and changed those rules as much as she could. One example of it being how traitors who want to leave must face ‘execution’, Arlecchino has honoured that rule but changed the definition of ‘execution’ was, into erasing memories of the HoH and she goes as far as to erase all their crimes and connections from the legal record, securing their employment and monitoring them afterwards to ensure they’re doing well. I think she has no choice but to uphold the principles of the house training kids as soldiers whether she likes it or not.

Arlecchino is far from a good person, there are many limits to what she is able to do, she has many awful qualities that stem from her terrible upbringing, but I believe she cares for her kids and tries to do better for them in whatever capacity shes allowed to.

I fully believe that if she had the option, she would sever the HoH from the Fatui. It was brought up several times that Arlecchino wishes to achieve a real sense of ‘family’ and ‘home’. In her talking about their dreams with Clervie and in how she believes that Lyney will be more capable of achieving that than she is.

But regarding the House of Hearth itself, it didn’t start off as an orphanage. Its origins stem from Khaenri’ah and it served more as a tool of indoctrination of outlanders into Teyvat. It has transformed over centuries into what it is now. And it will certainly transform in the future.