After rereading this from the very beginning, I guess the negative side effect of her remembering her past life as a price for the happiness of the people she left behind was meant to be this.
Either the gods amplified her emotional turmoil or there is more to this later (like the same cousin might end up being reincarnated as well but eh... Both Leonard and Sid are enough, heck she also has the entire knight squad her brother is in charge of, Grey and Silas also have/was shown/mentioned to have some attraction towards her). This is enough for the slow romance already. Have Leonard slowly realize his feelings and have Lily finally move on and complete her happiness.