According to Olodan, I've already stood in the Shadow Druids way. I assume that's why I don't get the dialogue option, but I have no idea what I did. Was it saving Arabella?
If you've already spoken to Olodan then that's the issue here I think.
She only shows up once you tell Kagha you know she's working with the Shadow Druids, right?
And in that scenario she's a bit quick to jump the gun; she immediately reveals herself to everyone and tries to take the grove by force, branding you her enemy in the process as in her mind you forced her into this last resort version of her plan.
Or is there another way you can speak to Olodan?
That's the only way I know of and sadly it results in her not liking you very much and thus inadvertantly saving the Tieflings from having to leave.