Agree, and it's puzzling in so many ways, and yet maybe not.  She wouldn't be the first mother who even when confronted with undeniable facts that her child was a bad person stuck by him anyway.  Why?  Maybe guilt on her part, maybe she blamed his father for his bad behaviour and thought she had to be the one to love him anyway.  Maybe the Queen herself had put up with so much - so many rumours over the years about Philip, plus of course Charles and Camilla's long time affair - because she thought she had to.  The monarchy has a long history of open affairs, illegitimate children etc etc.  And Harry's own record, while nowhere near Andrew's, is not exactly perfect either, and yet everyone stuck by him until he didn't want to stick by them any more.
It does seem clear she hoped it would blow over like every other scandal, gave him the Lodge to keep him close by, took him off public duty so he wouldn't get in more trouble, privately scolded him when he did, and kept loving him as a mother if not a queen.  And hasn't a lot of it only come out since she died? 
Families can be complicated, and never truly understood I believe unless you're part of it.