Using "without the bad we cannot appreciate the good" cannot justify the fact that God allowed or created an environment mixing good and bad people in my view. Also that could be used as an excuse for many things, such as I could hurt someone physically so that when they heal they feel better and appreciate not being hurt any more. Also many people live such lives that they have no good to appreciate.
If you hurt someone to use that excuse then you are defying God's will and doing as you please. Many people do this but it does not justify their actions. His Will is that we become good people of our own accord without being forced into it. That is where the Guru Granth Sahib Ji is useful as it provides guidance on how to follow a path to become a good person. You cannot compare your actions to God but can aspire to imbibe the good qualities more detailed in Mool Mantar.
As I said its a pathway. Sikhi is not a religion in the traditional sense, more moral guidance and advice on becoming a spiritual being. Spirituality helps one achieve ultimate peace and happiness. Moving closer or further from realising God makes us happier/less satisfied, not God so it has nothing to do with God judging us. God is not a person that can judge.If God does not judge then there is no point in religion. However my view of Sikhi suggests god does judge, as it is believed that you become closer to god by being a good person, and you beocme further away when you are bad, it's semantics really.
We choose our own path according to our actions. Stop personifying Waheguru!! Let go of your preconceived notions from Christianity or whatever you have had experience withWhat I am saying is that, God being the creator of everything in this universe, can not be surprised as he has made everything if he is god. He will know what is going to happen, so is there even a point of having free-will? For example God puts me on the planet, he knows where I will end up. Or are you suggesting that if I went from a bad person to a good person God will change his plans/overall view of me?