So how do I integrate the original myth of Dahut and her evil ways into my campaign setting?
The places where your implementation of the myth failed were simple: Gender bias (tied somewhat with the general idea that sex is bad) and agency.
In the original myth, it was an individual person, doing things for her own reasons. Nothing wrong with that. Put one women who gets power from her deity for doing this, and you're fine.
But your approach was to project this onto women, plural, as a class. Either the women must do this (which is rapey), or they choose to do it for no reason - the women of the court, and their uncontrolled, unconventional sexuality, are evil, collectively. That's problematic stereotyping. The thought that women would just want sexytime with condemned criminals, for no other reason, is kind of like "Bwhahaha-twirl-mustache" evil.
Here's a version that actually ends up giving you campaign political plot hooks:
You have the court of the Duke. The presence of a Duke implies some higher authority, like a King/Queen. So, we take it that while the Duke has considerable judicial power, there are some things he cannot do - like maybe he cannot strip a noble of lands and title. So, if you have a noble who is up for death, the Duke cannot simply confiscate their lands and property. They must go to some rightful heir, or they revert to the King/Queen. Maybe elsewhere in their law, it is established that, when the noble is not around to designate which child shall inherit what, the Duke can do so.
Now, you have a reason for the behavior - condemned prisoners get one last chance to produce an heir. Until that heir comes of age, of course, the other parent will have control of the lands and titles in question. When the non-condemned parent has other children, or is just really scummy, they tend to shuffle the kid off to the church, because if they are caught actually killing the kids, they themselves face execution by the King/Queen for stealing titles from the crown. The kids, however, are not told who their parents are, so they usually don't show up on their 18th birthday to claim their birthright, so it stays with the new family.
So, now you have a church containing *legitimate* heirs, which is political funtime just waiting to happen! The structure is ripe for abuse by the corrupt, but is applicable to either women or men who are condemned - you just have to wait to see if the lady has issue from her last night before you execute her. And you have a good reason for someone to want to sleep with the condemned: title, lands, and power!