I wouldn't call it stupidity. You know perfectly well that in the context of the current story, Callista simply had no choice...theoretically, she could have refused to make a deal with Alexander, but he threatened to kill both Kane and Olivia, and who's to say that this crazy old man wasn't capable of carrying out his threats?
And as usual, we come up against the fact that for Dom Kane, this upbringing (multiplied by the long-term plans for Kane on the part of various forces, including Callista herself) proved sufficient for him to advance to the impressive rank of K9 in a single game week.
As for sub Kane, the fact that he ended up in deep shit is the problem of Tess as screenwriter, who for some reason did not bother MC a choice that could have turned the situation in his favor, allowing him, even in this dubious program, to remain not a pathetic worm and an insignificant slave, but a man who still had human dignity left.
But since this femdom crap is illogical and unnatural by its very nature, Tess couldn't come up with anything better than to blame it all on Callista, the "supposedly bad mother", to give the sub players an excuse that it wasn't their fault who their MC became, but someone else's. And now these lazybones can just sit around and wait for their influential parents to come and save their asses. How convenient and responsible, right?