I saw it differently. To me, it seemed as if Milich was actually surprised and angered at first, and the next day he had gone 180 and realized that his daughters promiscuity could be profitable. If he had known about it, it seems like a bad way to sell his daughter to Dr. Bill. I think that if he drastically changed his mind, it's hard to take and believe, but more fucked up.
Also, I love how she whispers that line. What is it, something about getting the cloak lined in maulin? Or some fabric? I might've made that word up. But it's so inaudible, I thought it was some really important line. The question that always arose in my mind is, does she know about the orgy and that's a certain requirement for the cloak? I like to think so.