Big agree on the narrative snarl of FW. If they do have memory erasure or alteration, I would be pissed. Whenever that element is added, it always fundamentally changes the dynamics of the power structures and character relationships in settings. Fates had it with Corrin's memories of Silas being tampered with, IIRC. That being possible means that Garon could have conceivably done it to any of his other kids. Or anyone that could employ skilled mages could do that, maybe.
And then, from character to character: let's say Sothis could do this. What's stopping her from doing it any time she wants, for any reason? How could anyone trust her? Would they even be able to tell something is wrong, or could she basically puppeteer them? If the only solution is to hope the character is A Good Person, then every interaction they have is suspect.
I'm also worried that it would give Agarthan stans something legitimate to harp on Sothis for, and in doing so, justify her murder.
Well, in Corrin's case, they were a traumatized child who forgot a childhood friend because said friend was banned from ever seeing them again. So there's a logic there that needs no big/otherworldly explanation.
But like you say, with Sothis and the very nature of the event in Dagda, it speaks to so many snags and issues. Should she be involved with a massive memory wipe or rewind even when she's no longer physically alive, what's stopping her from then influencing Fodlan in the same way? There's no current logic we have that would prevent her from doing so. She could theoretically send Eshmel and Fortuna to Fodlan instead to fix things and stop Rhea from "breaking the taboo" and whatnot.
And since Sothis is just... not that well utilized or written as seen in 3H, we effectively just have to take her word for it that she's doing the right thing. Because how could she not be, she's Byleth's mind friend! Ignore the fact that we never get her properly interacting with Rhea and the small times we do, she's kind of being a bad mother, what matters is that she's the Sassy Goblin™️lodged in your brain.
Again, as you said, because the writing around the morality would then be weak, it creates an opening for Agarthan stans/defenders to say "um actually it was actually totally justified for this genocide to happen, I'm correct and moral." It's ridiculous.