Raze, it's possible you focus so much on the game that you aren't an active gamer or care much about Achievements; that isn't a bad thing, but you may miss the reason so many are frustrated by this Achievement. Note that none of the other companion quests cause problems; they are all straightforward, with some more challenging than others. I have completed almost all Achievements in the games I played for the last 3 years...it adds a layer of satisfaction to a good game....thousands of Achievements and this is right up there with the most frustrating as you have no way of knowing what to do, which makes it random...and there is nothing more frustrating than having to play 15+ hours to find out you didn't get the random Achievement right. "Teach Madora" mercy is by its own wording nebulous.....do X makes sense...say, complete the game on Honour....most won't take the time to do it, but that doesn't mean the Achievement is not straightforward.
Let's take your words above. If that is your list and noting you keep saying "pay attention to Madora's responses and it should make sense"....yours words...let's see.
After talking to Lawrence -> I thought the same; his fawning is more likely a symptom of fear than of respect. Madora does NOT respond to this.
After killing a snow warden -> Anything dependent on cloud cover for survival is better put out of its misery, I say. Madora does NOT respond to this.
I think there are a few more she makes no reponse to, but I am not playing the game an 8th time to check

The other interactions, some she gets mad and some she acknowledges your point....so....no response, angry response and tempered responses.....THAT IS THE DEFINITION OF RANDOM!!!!!!!!! If you can't see that, you are a tad too close to the issue and need to take a step back.
Very enjoyable game and I enjoyed each of my playthroughs.....put off FO 4, TR and AC to play this....and would do a 2 LW playthrough now that this Achievement is out of the way, but I am burnt out and will come back after those 3 games. Thanks.