
This is so intense. I don't see her as the bad guy no matter how much the author tries to convince me. I've read stories where people are truly awful and even they don't get this treatment. I hate that he used her. I don't like him but I get that he had to get rid of the family that was causing destruction. This story is too much at times.

Personally, I don't think that the author is trying to make her look like a bad character but rather a pitiable one. What her family did was not her fault, but she chose to take on her family's sins/crimes as her own as well. She didn't have to do that, but because she was so pure-hearted, she felt so guilty that she was ignorant of their evil ways, even though it was not willful ignorance.
In essence, although the story is intense, our MC is just taking her unnecessary self-repentance to a ridiculous level. She doesn't need to do anything or pay for anything because she didn't commit any crimes/sins. Yes, she was used as a scapegoat of sorts by Kaido (?) in order to calm the people's rage wrought by her family. However, he was the one in the wrong for lying to people and further manipulating their minds into thinking that our MC really was bad person (like the rest of her family members) when she did absolutely nothing wrong. People already thought of her as an evil woman, even though they didn't know the full truth.
So, in the end, this is a sad, intense story with a pitiable female main character who was just too pure for her own good. I think she was reincarnated because she was innocent—blameless of the sins people accused her of. And this new life, instead of being spent its entirety in repentance without being allowed to feel any good emotions, was supposed to be spent living a joyful life with a fresh start. But she didn't see it that way—instead using her new life for needless atonement.
That's my take on this so far, anyway.

It's probably because she knew she had no way out by that time because the people already hated her. Kaido would have taken the heat from his subjects if he took her side (even if she said herself that she was innocent) because there was no proof other than Kaido's word. And the MC knew that was going to make Kaido look bad, as if he was protecting a criminal in sheep's clothing. So she decided to, as you said, "act evil." But she did it for Kaido and to try to absolve her own guilt of not knowing anything until the end. She's still not guilty of anything other than giving up, I suppose. That's how I see it anyway.
Well that's one way to get rid of him