Peddler might be an asshole, but he is respectable to an extent. The world is full of assholes, you just gotta be practical everyone. And the issues with the sect are known to the elders and pretty much disdained but they have a larger plan at play (probably no more than the leader, that other elder talking to him, and maybe the elder of Bei's clan know).
More char develop with Bei, so even her family knows/sees her relationship with Lil Mo as lovelorn. (pesky love)
Question, did the other people in the dreamland get to see the other fights inside also? Either way, she really felt bad about giving such a crap spirit to Mo earlier. About whether Mo will accept, maybe not because of his pride and all. He can also use those spirits to feed the soul inside him, right? He does need an upgrade from cute kitty to some terrifying ghoulish body horror to fit the aesthetics lolol