Instead of using her so-called arcane spell or giving us Theotech that could revive Lupina directly, Kuzunoha pushed a roundabout method.
The fact that the Potion of Healing exists—in a world where ohrtending exists, means that any method of fast-healing outside of interacting with Calamity Objects was outright scarce.
For someone as self-centered as Kuzunoha to offer an indirect Xenogene Injector method, it held many meanings.
One, she also had no reliable method for healing, and now offered this Xenogene Injector to a sacrificial lamb that would become the target of many future factions in Carcosa to fight over.
Then again, it could be just me being hyperbolic.
Second, she suggested this as the result of her underlying curiosity and goal for entertainment. Those two reasons alone were enough justification to deem that there could be something shady with that Xenogene Injector.