I don't see it quite so much as "blinded", but as "trying to justify her decision to withdraw."Julie wrote:My second thought: "Is Monica really that blinded by her experience in The Library?"
Monica is like Shelly... she wants to live a normal human life, and is often rather daunted by the strangeness into which she's been tossed. She's spoken several times about how scary it was to have her friends deceive her during the CM shutdown, and she spoke enthusiastically to Tina of "not letting the paranormal dominate her life" or words like that.
She doesn't relish the danger... she didn't ask for it and she's not really an adrenaline junkie.
Phix now symbolizes that danger to her, just as Shelly does. Monica was almost willing to ditch Shelly, but has apparently reconsidered that in the face of Euryale's shaming.
Monica has much less history with Phix, and cutting Phix out of her life would significantly disengage Monica from both direct danger (symbolized by Phix herself) and from the paranormal world (symbolized by the Library, the knowledge and history it holds, and by Phix-as-Librarian).
It's emotionally easier to justify cutting somebody out of your life, if you can convince yourself that they won't care if you do, or that they would even welcome the relief of not having to tolerate your presence.
I think that's what Monica is doing here.