Kagha's actions seem unreasonable because we don't know her motives yet. But she was trying to achieve something on behalf of shadow's druids . There's a note about it near the encounters with shadows at the swamp.
So the whole " purge the heresy" bs from kagha might be a way for her to justify closing the grove. " If they came here, more will come". Also the absolute wants to attack the grove and it has nothing to do with the refugees.
Her actions seem to be a bit unreasonable but with the absolute, bhaal being teased in various notes and the shadow druid thing ... I think there's more to it. I think khaga is not a silly psychopath. She has an objective and she's extremely bad and putting it into place.
Kagha is being manipulated by Olodan who is acting by the beliefs of a BG1 throwback character. Where Olodan comes from or how she managed to just walk into Halsin's circle with her cabal and puppet the interim leader, we don't know. I doubt it will be explained in Act 2 and beyond though. Her story is done.