I really don't understand why people virtue signal for races that were originally created to be fodder/evil.
You can have a society and culture and the majority of them be evil or bad compared to yours. People are so focused on "but the goblin I made is actually chaotic good so don't discriminate against goblins!"
Congrats, your goblin is an exception. The same goes for every "lower" race meant to be enemies for XP.
The thought process for killing the goblin children was that they were going to warn the rest of the camp. That's literally what they are trying to do if you don't kill them fast enough.
I like what PFK does. Lawful good goes hardcore in the eradication of ogres, orcs, and monster races in general for the sake of all the is "Good and Just" but it obviously seems like genocide. I remember there was a moment where I had the option to kill this monster dad's kids after I killed him. The lawful choice was to kill them, chaotic choice was to let them go. Both good if I remember correctly. It shows the hypocrisy that good is in relation to something. Law of your culture or freedom to live.
I was not well pleased with some of Kingmaker's ideas of what "good" entailed. Especially since they basically force it on you.