No, it does not and to excuse the CAU means that I have to consider you to be at least to some degree at least totalitarian if not outright a fascist.
It matters not what you or I think about CAU from ethical standpoint.
In the eyes of Protectorate, FD's actions further legitimize existence of CAU.
That's simply how it work. You or I can personally believe that within our moral framework "nothing can legitimize CAU" all we want. However, Protectorate clearly does not share that sentiment.
Also, you seem to be rather confused what "totalitarian" or "fascist" actually means. An absolutely morally bankrupt government with full blown "might makes right" attitude may very well be neither of those things.
It is completely irrelevant what they think. The German Nazis thought that the atrocities they commited were for the betterment of humanity. Hint, again irrelevant, they were still fanatical bigoted genocidal maniacs.
And?
There are plenty of fanatical bigoted genocidal maniacs throughout history that existed with at least moderate success for dozens if not hundreds of years.
And while they exist, violent terror campaigns that target civilians (what FD are effectively up to) usually only strengthen their rule.
The FD does not target civilians specifically. They are a picking exclusively targets who are either Protectorate or collaborators. You can spin it however you want. The CAU has no grounds for existing outside of fascistic rationalizations. You can easily do the same with elite commandos who just give you a quick death. The CAU is excessively vile and flat out evil. Not much else compares in Underrail. They are akin to the Dirlewanger brigade, just more sophisticated.
What strengthens a dictatorship more than anything is apathy. Going by your logic any kind of freedom movement should be prohibited because it might cause totalitarian regimes to "justify" horrendous extermination and/or terror units.