Well I’m unsure if you’re referring to people as a group or the npc but I’ll refer to both of them to make my life a lot easier.
For the NPCs, they feel uncomfortable due to the way she talks about death, most people don’t welcome it or speak of it as fondly. Hu Tao sees this differently, she knows death is a necessary process that will happen regardless and perhaps due to her job and views, she speaks of it in a more open way then most people. She also doesn’t like when people go against that flow of life and death, like Qiqi, which is why at least she would try to bury her until learning more on her later.
For people, it could be the same reason as they don’t particularly like how comfortable Hu Tao is with death. It could also be how broken she is, her skill set allows her to out damage Childe and Diluc easily with her best weapon. Not only that, but her skill set and constellation give her a huge fucking advantage as a character. it allows her spam charged attack and at the end, gives you 100% crit rate and 200% physical and elemental resistance, so you could totally have a full crit build on Hu Tao and do well. She, just like Ganyu is a little broken.