I'll let the previous wall of text slide as summarize "let's agree that we disagree"... And I do agree with you there.
As far as "balance" specifically, I still don't see it. If that were the case, wouldn't she fight against the good side whenever it became more powerful than evil? After all, she wants a balance between good and evil. So if she's meant to keep balance, when Ataegina says "my side", the meaning of that changes depending on circumstance. She's against good if it's too strong, and she's against evil when it's power is too great.
On this Part however let me give you my 2 Cents, the Ultimate "Evil" is stronger throughtout the Story, not only is his magical ability higher than MC he also has the 7 Sins that work in his intend and are enemies with the MC.
The MC deliberately weakened himself in order to bring Magic to the Mortal Races in order to fend for themselfes.
You stated yourself that Ataegina acts different dependent on which route the Player chose, if he is "Good" she acts neutral, if he is bad she act in the name of "Good" and if he is neutral she decides to watch over him some more in order to choose her further approach.
As an example, let's consider the case of the elves momentarily. I might be forgetting something, but from what we've seen so far, it appears elves in the main kingdoms we've seen are mostly good and/or neutral on the whole, not evil. There may be individual elves or even factions within those kingdoms that are evil, but they mostly seem to be good.
So, then, when they had spread across the land and had a huge chunk of a continent under their rule, she would presumably be in favor of the Slayers in the beginning if she were neutral, because the Slayers would be tamping down those pesky do-gooders to keep the balance in the world. I don't remember anything suggesting she ever supported the side of evil here. To make sure balance was maintained in the universe, she would have to pick a side from time to time and switch sides when it was unbalanced in the reverse.
That would indicate that she actually bothers about what the insignificant mortals are doing... which she had never done.
When the Slayers dominate the world thanks to their alliance to the demons she never let them feel holy retriubtion.
The "Balance" she seeks would be the Balance of the Powers themselfes, not about the people useing it...
Not sure if you are versed with Star Wars, but the best analogy I can find is "The Force and it's Keepers"
Being unknown to mortal races doesn't mean she is "too distant . . . to feel compassion". Do people feel compassion when they hear of those starving in poorer parts of the world? Distance might make it harder to empathize, but it doesn't mean you can't have compassion.
I think the better analogy is to make, if you hear about animal abuse would you care enough to stand up and fight against it?
There is no indication that Ataegina ever felt anything towards the mortal races, neither amusement nor hatred... they existed but they never mattered to her.
Ataegina want's "Balance" in the whole, if a single world becomes completly "Good" or "Evil" will likely not matter, to begn with both the Ultimate "Good" and "Evil" only use the mortal races in order to fight their battle in Proxy.
