I don't understand what your point about the context of choice is.
Of course in the Curse of the Golden Flower it is only out of ignorance that brother and sister choose to sleep together. That's why the revelation that their relationship was in fact incestuous is so significant. And that revelation shows that, in this case, ignorance was not bliss. It was terrible. I won't spoil the movie any further, but the proper response is not "soul searching".
And it's simply not true that in these sorts of contexts the character concept remans the same eg if my concept of my PC is as upright in all things, and then it is revealed via unilateral GM fiat that I have in fact committed incest, my character concept is blown away. And a new concept is also added, unilaterally: uwitting committer of incest.
If my concept of my PC is stalwart defender of worthy folk and then it turns out via unilateral GM fiat that the folk in question are serial killers, my character concept is blown away. And a new concept is also added, in this case probably something along the lines of sucker! although the context might establish something slightly different.
I don't think what I'm saying is hard to follow. A person isn't just what s/he believes s/he is. If it was, people could never learn new things about themselves that make them ashamed or disappointed or (conversely) excited or proud.
This last bit is exactly what I'm getting at - in both the examples above the character believes he/she is something (upright; stalwart) and then learns something new either about him/herself or about something that shaped him/her; and then has to deal with the feelings of shame or disappointment that follow.
How is this bad?
With respect, this suggests a very shallow approach to fiction.
Suppose your PC is hired to assassinate someone, and does it - and then it turns out the victim is your father? Are you really going to tell me that that doesn't change things? That there is nothing to the game but the successful process of executing the intended hit?
In the moment, before the added knowledge is revealed, the successful hit is the focus of the game. Then, after the reveal, the focus changes to one or more of a) get your father revived, if the setting allows for such; b) find whoever ordered the hit and return the favour; c) find out why the hit was ordered - just what was dear old Dad up to anyway, to put him in my crosshairs - and follow up on that. And on top of all of this there's likely* going to be some serious remorse, possibly even leading to a change of career (in-game, change of class or alignment). Tons of stuff there to mine for both role-playing the character and furthering the campaign!
* - assuming a reasonable previous relationship with your father; not always a given.
Finding stuff and taking it from A to B is not the stuff of which my RPGing is made. The purely tactical process of carrying out a hit is not the stuff of which my RPGing is made. What is key is the fiction that is established.
Ah...it just struck me. You're looking at the means - the fiction established en route to achieving the goal, where I'm also looking at the ends - was the goal achieved.
If the GM uniaterally changes that fiction to invalidate the players' contributions, that is a sucky game.
A sponsor's heel turn does not invalidate the players' contributions, though. How can it? The players (I assume!) didn't come up with the sponsor's personality or motivations or whatever; that's all GM-side stuff so there's no player contributions to invalidate there. The players/PCs found and returned the McGuffin, and developed their characters along the way and also wrote the story of that particular adventure; those contributions aren't invalidated by the sponsor then turning on them. In fact, the sponsor turning on them IMO gives a fine reason to continue the story.
Here's a more apt comparison: 10 years after buying the car you learn that you had a brother, one who was adopted or fostered out before you were born, so you never met him. And now you try and track him down, but you learn that just over 10 years ago he was killed, hit by a car while crossing the road. And the owner of the car, who couldn't handle driving that car anymore, sold it. To you. And so now all your fond memories of your times in your car become memories of enjoying time spent in the car that killed the brother you never met. I think for many people that would make a big difference to those memories. Both in fiction and in real life, those are the sorts of discoveries that can change a life. I doubt that many people would respond by way of "soul searching".
So far I've given examples that changes things in a bad way; sometimes people have things revealed to them that change their lives in a good way - I'm thinking now of the Balld of Bill Hubbard in Roger Water's album amused to death - a true story about a WWI soldier who'd been trying to carry a shot and dying comrade back into their trench but had to leave him in a shellhole in no man's land, and for years had lived with the burden that his friend was never found so that he might be buried and his death recorded; and then when he was an old man, he discovered his friend's name on a cenotaph roll, and - to quote - "It lightened my heart." (This example also helps us think about soul searching - as the soldier says when being interviewed, he had always wondered if there was something more he could have done to bring his friend back to the trench - but now that his heart is lightened, that soul searcing is no longer necessary.)
See above re people learning things about themselves and-or their environment.
The GM's role is to provoke the players to make choices. This may or may not require soul searching on the player's parts (either for themselves, or as their PCs).
If the GM wants to introduce an apparently pleasant person into the fiction, who then turns out to be a serial killer or vampire (an old standby!) or whatever, maybe that will make for some good RPGing and some appropriate soul searching, depending on how it's handled and the mood of the table.
But I'm talking about a case where the player has already estabilshed that his PC is out adventuring so that he make the world safe for his dear dad. This is the character concept. And now the GM unilaterally determines that that concept is radically mistaken, and that dad actually isn't worth saving. Or in whatever other way, depending on the details, unilaterally reveals the PC's self-conception and motivation (which in typical cases is also the player's conception of the PC and the PC's motivation) to be radically misguided.
I can't think of any RPGing context in which that doesn't just suck.
Here it depends on what if anything has already been established about dear old Dad. If either in the player's character history or the GM's notes (we all know how much you love those!

) Dad's been established as a peaceful stay-at-home guy, then suddenly turning him to a serial killer is going to take some real serious justification to not come off as anything but badly done. But if Dad's been left as a blank slate - the PC talks about 'dear old Dad' all the time but neither she nor the GM ever define what dear old Dad's all about - then making him a serial killer is in play, the same as would be making him a simple farmer or the deposed King of Anaqara.
I assume it was planned, as it had all the hallmarks of ye olde raileroade.
You (and thus we) will likely never know now, but I'd have been curious to see what the GM had in mind going forward with that one.
Lanefan