Was it really bad if it was all intentional though? I heard from some people that they intentionally made the ending that way because they planned for a sequel from the start.

This felt oddly similar to how "The Good Ending" executed its plot with its demo, where Monika was treated unfairly, up to the point she killed herself and the MC being a huge jerk about it too. Heck, the demo for that, if I remember correctly, was panned purely because of that, yet it was all intentional because the Act 1 for it was done really well.

Also, I don't remember where it said the player was unwittingly causing them harm when it was portrayed in the actual mod itself that he's clearly enjoying their suffering for his own entertainment.

Other than that, I agree with your assessment, Sayori killing someone and them making jokes about it seemed odd and there are some glaring issues with the characterization as well.

However, that's why I say if it was done intentionally, does it really make it bad? Plus, with the sequel coming up, I'm inclined to believe that that is the case.