Wyll not only knows that hurt people hurt people, he also knows that not every "monster" has a choice or that sometimes supposedly "evil" beings are more than they seem.
(Which is why he is so reserved about worshipping gods: he says he pays his respects to the Triad, but I think, deep inside, he knows that, aside from Illmater, kind gods would turn their backs on any poor soul who was changed or "born evil" in disgust)
He himself is pretty much "evil" through a lawful-stupid lens - he made a pact with a fiend, and he uses hellish powers (even before Mizora gave him devilish features, some lawful-stupid goons would have taken offense with his powers, I guarantee).
And while he knows that the fiend found the best conditions for offering him the pact (the father is away, the city is in danger, he is only a teen with a rapier), some sanctimonious prick would still go with "wEll yOu cOuLd hAvE dOnE SoMeThiNg else" lecture. Wyll knows, he couldn't.
And so, he won't be the one to cast judgment - not before he listens and knows the entire story. He was convincing himself that Karlach was that bloodthirsty devil; he wanted to believe that there was all to it. But the moment he realizes his mistake and changes his plans? He smiles at her and welcomes her. It's all genuine - because even though he knows he'd have to pay the price, he is glad he didn't spill the undeserving person's blood. He knows it's not Karlach's fault he was manipulated.
(Which is why I won't cut Mizora any slack; she belongs in the Mystra, Shar, and Cazador dissing corner)
If anything, Ulder Ravengard is lawful stupid. No, I won't apologize. Yeah-yeah, duty and shit, but if only the guy had used his brain and let his trust in his son act before his "but what would the people say" brain cell; if only he had told Wyll he is there for him, and they would figure it out together...Wyll wouldn't have to spend all these years alone, with only Mizora hurting him for her own amusement.
Ulder basically left his only child to fend for himself, left him to be clawed and mocked by a cruel cambion who belittled him and treated him like her toy and property - and it's only because of Wyll's inner strength and absolute refusal to give Mizora any satisfaction (by being a regretful and miserable petitioner), his conviction that he did the right thing, that his sacrifice was worth the cost, and his intention to see good in any situation, that got him through this shit.