I totally agree with you on everything. Sure, at first, it looked like Amity was a bully but only at first, I know in the episode Lost in Language was when we started to see Amity begin to change for the better thanks to Luz's positive influence on her.
It's thanks to Luz that Amity changed and/or became the loving young woman she wants to be and not who her mother wants her to be. But I agree that by the time Understanding Willow aired. Yes, it appears that Amity was just putting on an act to protect Willow from Odalia's wrath.
Odalia forced Amity to cut her ties with Willow and threatened to bar Willow from any school to bar her from getting an education if Amity maintained her friendship with Willow. All because Amity got her powers first and Willow was a late bloomer.
Odalia even forced Amity to become friends with kids from other rich families that Amity didn't want to become friends with because she knew they were cruel and mean but her mother forced her to do that for reasons of status competition with other rich parents.
Odalia was keeping Amity monitored and Odalia forced Amity to bully Willow which Amity at the time didn't have a choice because she knew Odalia would take it out on Willow.
She even monitored Amity's thoughts with the mind reading necklace. The real bully will Boscha, she was such a brat with a criminally sociopathic, violent temper and she was more physical and violent.
But thanks to Luz's positive influence. Amity was becoming who she wanted to be and not who her mother wanted her to be. The real bully was Boscha and Boscha deserved the amount of hate she got. Boscha shown no development, no change and no redeeming qualities whatsoever.
It's thanks to Luz that Amity and Willow's friendship got mended and Boscha did eventually get karma raining down on her as in Wing it like Witches. Boscha was at her worst which was her true bullying nature.
Even Boscha's friends shown they didn't like her because of her violent nature. She nearly hurt Luz but Amity did make sure that Willow and Gus reconciled with Luz to help her because Amity knew Boscha would hurt Luz.
Sure, Luz and her friends might not have won the Grudgby match but Boscha's friends cut their ties with Boscha and they became friends with Luz, Amity, Willow and Gus and Boscha became friendless because of her bullying, violent behavior. She got what she deserved.
Odalia even tried to expel Luz, Willow and Gus just because Amity became who she wanted to be and not what her mother wanted her to be. Odalia even made that deal as a death trap set up. If all three of them fell for it.
Odalia would've murdered all three of them. But Luz knew they were desperate and she tried making a deal with Odalia but Odalia lied, wasn't going to uphold her end of the deal. She was intentionally going to murder Luz in front of everyone and make money off it. That's pure evil and sick.
Amity, Willow, Gus. Emira and Edric all went to save Luz, stop Odalia, and Amity stood up to her evil mother. Gave her an ultimatum that she was forced to comply. She was going to go back on her word but it took Alador's intervention to stop her.
Eda later on found out about it and even Eda would go all mama bear on Odalia ( probably on Alador by association but don't know if Eda changed her view on Alador ) and when we saw Odalia again. We see she has become worse.
She knew about the real plans for Day of Unity was to wipe out all life in the demon realm and Odalia supported the genocide because she believed that her family and herself would be spared and made royalty but despite the fact that Odalia was lied to, she enjoyed her actions way too much. Even Luz, Willow, Gus, Hunter, Amity, Edric, Emira and Alador all turned on Odalia and she still didn't change.
Even though Day of Unity failed. Odalia tried to manipulate The Collector to gain more power, even though she was turned into The Collector's nanny. But once Belos was forever defeated, Odalia still never changed and no one wanted anything to do with her.
We all know that Amity, Edric, Emira and Alador and everyone wanted nothing to do with Odalia, they never spoke to her ever again and they never wanted to see her again ether.
We all know Adrian, Tibbles, Terra, Odalia, Kikimora, Boscha, Bria, Jacob Hopkins and all were still faithful to Belos after his defeat were never redeemed. The all were probably locked up.
Sorry this is so long. Just stating what I believe is the truth and I do agree with you on what you've stated.