He didn't say TLC was evil, but that his methods were too extreme which they are.
When you gamble with the population of a city, in both Sword King City and elsewhere, that's extreme because if your plan doesn't win then they all die.
TLC himself says his gamble/collateral damage extends from martial artists to normal people so I don't believe there's a need to defend him. He knew what he was doing.
He didn't say TLC was evil, but that his methods were too extreme which they are.
Puzhu and TLC know of each other because they both have dealings in the Jianghu. They don't consider each other 'friends'. While Puzhu and XFT are chess players who have known each other for years and consider one another a friend. It's true Puzhu didn't know her true identity but he had his suspicions. To him any evil person can repent and I think that's a large part of why he continues to socialize with her.
He didn't say TLC was evil, but that his methods were too extreme which they are.
We're on TLC's side because he won but if he lost then many people would have died. Besides, a person would side with their friend of many years rather than an unknown martial artist so Puzhu's reaction is normal.
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TLC himself says his gamble/collateral damage extends from martial artists to normal people so I don't believe there's a need to defend him. He knew what he was doing.