What do you think of Xue Yang? Since you asked me the same thing.
Xue Yang, Xue Yang, Xue Yang...
He’s one of the people I really like as a character, but really don’t like as a person. I find him so, so interesting throughout the Yi City arc, especially motivation-wise. He seems to be driven by one of the typically villainous motivations at first, that being non-proportionate revenge, but as that arc continues we see that his feelings are changing and that motive becomes like more of a mask to himself – he’s trying to convince himself he’s doing this for revenge, he’s trying to convince himself the only emotion he feels towards Xiao Xingchen is hate, even when there’s clearly more to all that, because it being anything else would completely destroy this idea of himself he’s built up in his head. There’s a really good meta about the motivation behind his actions trying to make Xiao Xingchen a ‘bad’ person, and it’s all so interesting!
Like you said, he has a chance to change, but doesn’t take it when the cards are on the table. I think it’s almost shifting responsibility off himself? Like how he refuses to accept that he’s at fault for Xiao Xingchen’s death, instead blaming everybody else. I feel like he almost thinks “well, I’m a bad person, that’s just who I am and it’s not my fault” and wants that to absolve him of blame.
And the thing is that none of his conflicting motivations and depth make him any better of a person! At the end of the day, he’s still killing and torturing innocent villagers, he’s still making Xiao Xingchen kill unknowingly when finding out would and did drive him to suicide, he’s still the reason that he died, he still killed Song Lan and A-Qing in horrible ways. It plays into the ‘love is an action word’ theme explored by @rynne in the meta I reblogged – he may have these conflicting feelings towards Xiao Xingchen, and I’d argue that some of it was a twisted love, but that does NOT make him a good person and does NOT make their dynamic healthy, because at the end of the day, his actions are what they are. You can’t choose what to feel, but you can choose what to do with that, and what Xue Yang continues to choose because of this mindset and absolution of blame is not the right thing to do at all. And none that means that his life with the Yi City crew would have been happy if Song Lan hadn’t turned up, because making somebody do something completely against their morals without their consent is not okay, whichever way you cut it. He wanted and had a fantasy of living a happy life, but again, his actions didn’t match up to that and were ultimately what caused that fantasy’s downfall.
And another thing that makes him interesting, from a narrative standpoint, is the thematic parallels are everywhere, especially between him and Wei Wuxian. Like you already said, they had a similar childhood – both grew up poor and on the streets, for example, both went through circumstances that could have made them want to enact revenge, both are very smart and talented. But the thing that separates them is their choices, and that Wei Wuxian chooses to move on and be kind, whereas Xue Yang traps himself and is consumed by his resentment (and chooses that even when feeling other things). I also saw another post a while ago pointing out the parallels between Wei Wuxian being willing to give up a hand for his sect and Xue Yang destroying his clan for his finger, which has stuck with me. There are definitely parallels with other members of the cast if you search for them, but him as a parallel to Wei Wuxian is what sticks out the most.
So yeah, he’s a very interesting character, and I’d agree with you when saying he's probably the most interesting main antagonist. The gap between what he feels and convinces himself he feels and what he does is so interesting to explore, and you don’t really see that with anyone else (...I mean. Of course Shen Qingqiu in SVSSS exists, but that’s a post of it’s own. It is interesting comparing them though, especially since their choices are practically opposites – they both try to convince themselves they don’t care about somebody they clearly do care for, but whereas SQQ always chooses even impulsively to protect LBH, XY does... all that).
As a person, though? Well, that’s self-explanatory.