You take it too literally.
How else can you take it when God says that He creates evil ?
Lamentations 3:38
Out of the mouth of the most High proceedeth not evil ...
Judges 9:23 Then
God sent an evil spirit...
1 Samuel 19:9 And
the evil spirit from the LORD was upon Saul,...
Isaiah 45:7 I form the light, and create darkness: I make peace, and
create evil: I the LORD do all these things.
The mistake is to think that God is evil just because He has to have obtained knowledge of evil by 'creating' it ... God has to be all-knowing, so He has to have known evil and in knowing it He created it for us and us to experience what He cannot do directly [the spirit is timeless, it simply cannot know evil in itself , evil implies suffering and the spirit simply cannot suffer... it has no means to do so ]
For him to create evil doesn't mean he creates a human for its purpose to be an evil dictator or such.
But yes it does, God
created Satan himself [as Lucifer]and all his cohorts who make this world an evil place by being unloving , and the final antichristos will be the worst dictator that the world has ever known, but will be accepted as Christ returned by almost all men:-
Ezekiel 28:13 Thou [Lucifer, light-giver turned serpent]hast been in Eden the garden of God; every precious stone was thy covering, the sardius, topaz, and the diamond, the beryl, the onyx, and the jasper, the sapphire, the emerald, and the carbuncle, and gold: the workmanship of thy tabrets and of thy pipes was prepared in thee in the day that
thou wast created.
To look between the lines, God creates the choice to be evil.
As Paul pointed out, we imagine that we have the choice and we WANT to do good, but we do not always do good ... so it is an illusory choice because we are not free to do what we would to do :-
Romans 7:19 For the
good that I would
I do not:
but the evil which I would not,
that I do.
20 Now if I do that I would not,
it is no more I that do it,
but sin that dwelleth in me.
21 I find then a law, that, when I would do good,
evil is present with me.
Again Paul states it explicitly , we are not free because God makes us either for honour or dishonour , His choice, not ours :-
Romans 9:21 Hath not the potter [God]
power over the clay [man] , of the same lump
to make one vessel unto honour, and another unto dishonour?
Why would such a loving God create something so horrible?
Do not go into denial, observe first that He does, then seek the answer as to why :-
God simply has to KNOW, and creation is His way of knowing... God could not not know about evil, thus He created it... and we are God looking at evil, but we are projected into time and space, god is beyond time and space, its creator...
Thus our ultimate reality is timeless sirit like God, one with god, and our life as humans is merely a transient 'virtual' reality , like a dream, or an illusion , an imagining by God as-it-were ...