Because she was actually doing the right thing.
Giving monsters houses, terrains, jobs and stuff was not a bad move, except it was when Eclipsa and Star forced mewmans out of their houses to do so, as if they didn't have a fucking magic wand that coud literally create stuff from nothing. First
Secondly, Moon didn't know what the spell would do, you are really trying to force thingd at your convenience (are you Cotugno?) and make it sound like Moon knew perfectly what Solaria's spell was doing to people, and also trying to make it sound like the ones affected by the spell didn't hate monsters or were monster lovers.
Moon decided to stop Mina from her plans of killing Eclipsa and Globgor by only exhiling them so that Mina "would be happy" but unfourtunately Star fucking happened and made Mina consider she had a decision to take.
If you want to blame Moon you MUST blame Star as well as she is direct responsable of bringing Mina back to Mewni, she would probably have stayed in that back trash eating tacos' leftovers.
In resume, this is another portion of the show that would have been solved if Star listened to what Marco had to say, like bloodmoon ball or the hundred times he told her that he didn't want to get in the photobooth.