First of all, Chao's situation is different because the misfortune didn't fall directly on him—it fell on his son. he had the choice to abandon him and could have reached S-rank, so it was his decision to make. He knew the consequences, yet despite that, he still treated his son terribly, blaming him for his wife’s death even after everything they did to save him. This is what truly makes him a bad father. He willingly brought this misfortune upon himself. If he was going to lose his wife anyway and had no intention of properly caring for his son, then what was the point of sacrificing his future for them?
LC's situation now. While it's true that what happened to his family was tragic, you're forgetting something important—this is the world of POMA we’re in. When that happened to LC, he was just an ordinary mortal, like his family. They weren't from a clan or anything special, they were just villagers, like those the MC can kill when following the YB route. The fact that LC was able to survive and progress despite everything shows that the world isn't as completely unfair to him as you're making it out to be.
The whole point with LC is that he killed several MA and attacked a genius alchemist who is beloved in the sect. He didn’t end up in that situation because the world was unfair to him, he put himself there. After all, LC gave those earrings to Mei at some point, or else she wouldn’t have them. I highly doubt she could have stolen such an important item from his spatial ring. But I haven’t followed that route, so if Mei Mei stole it, I’d appreciate it if you could correct me on that part.