Mao discovered that he was not actually a eunuch. Given how dangerous it would be for her to be aware of that in the context she understands his position in court, she didn't want to acknowledge it. He, at the same time, is clearly very sweet on her and was deeply offended and frustrated that she refused to acknowledge that he is actually a fully functioning man. Since she wouldn't listen to him, he put her in that particular position to make it very clear that he was functional. Definitely inappropriate, but it is also clear that he never intended to actually do anything to her beyond what he had done to shock her into acknowledging his manhood.
I think the romance is fine. It's clear that this is more of a slice of life manga, and the romance is not really intended to be the main focus of the story. It's simply a running thread throughout. I think the overall World building is extremely well done and though it's a very slow burn, it's all very charming.
