Warning: spoilers ahead for the second episode of Arrow Season 8, called "Welcome to Hong Kong."
Oliver's deal with The Monitor during the Arrow-verse's "Elseworlds" crossover last guaranteed that the final season of Arrow will largely be centered on setting up the five-show "Crisis on Infinite Earths" crossover. "Welcome to Hong Kong" seemingly saw Oliver team up with Diggle, Earth-2 Laurel, Lyla Myle Michaels, and the returned Tatsu for The Monitor's latest assignment, but it ended on the reveal that one of Oliver's allies has a side deal with The Monitor going, and the question is whether it constitutes a betrayal.
The final moments of "Welcome to Hong Kong" revealed none other than Lyla Michaels meeting up with The Monitor, clearly unbeknownst to Oliver and her husband. She and The Monitor seem to be on much more even ground than Oliver and The Monitor, as The Monitor didn't brush Lyla off when she told him he should have told her about what would happen to Earth-2. He also revealed that what happened to Earth-2 was a "necessary sacrifice," proving that his decision to guilt trip Oliver and claim the loss of Earth-2 was all his fault wasn't entirely accurate.
When Lyla told The Monitor that she had the man Oliver had been chasing throughout the whole episode, and who Oliver had decided not to hand over until he found some answers about The Monitor, his response was both simple and ominous: "Then let us proceed." Lyla clearly has a game going that she's concealing from Team Arrow on Oliver's quest to stop the Crisis from happening, and she got her hands on a man that Oliver had other plans for. But is this a betrayal?
On the surface, of course it is a betrayal. Lyla did something that was the opposite of what Oliver intended, and she's keeping an important relationship with The Monitor a secret from Oliver and her husband. Oliver gave up everything and is obviously struggling with fulfilling his deal with The Monitor; both The Monitor and a close friend are keeping a huge variable to themselves, and Lyla is more or less actively and effectively lying. In this sense, Lyla did betray them, although her role as Harbinger in the "Crisis on Infinite Earths" crossover always guaranteed a connection with The Monitor.
On a deeper level, though, Lyla is successfully doing what Oliver is struggling with and prioritizing the greater good over personal relationships and losses that are relatively small in the grand scheme of things. For me, it doesn't reflect badly on Oliver that's he's kind of a mess as he tries to do what The Monitor asks of him, as it basically goes against everything that he became over the years of the show.
But Lyla secretly working with The Monitor could be essential to the good guys making a successful stand against The Anti-Monitor. It's an ugly twist, although arguably a necessary one. After all, wouldn't Oliver and Diggle be likely to try and stop Lyla from doing what she and The Monitor deem what has to be done, if it involves crossing lines? It's also a twist that's in-character for Lyla as head of ARGUS. Depending on your point of view, Lyla is working toward an endgame rather than protecting what is immediately in front of her.
Oliver hypothetically should be able to accept this. He'd been doing everything The Monitor asked of him out of his desperation to guarantee his family's safety, along with the rest of the multiverse. The loss of Earth-2 very much shook him up, which at least probably guarantees that Earth-2 as a "necessary sacrifice" accomplished what The Monitor was going for.
Lyla is effectively doing what Oliver tried to do; even if it hurts when the truth comes out, he may be able to see why she did what she's done. Didn't he try to conceal his alliance with The Monitor from even Diggle at first?
And honestly, Oliver probably has bigger things to be mad about with regard to The Monitor. No wonder he (and Barry) are going to be pissed when the truth begins to come out! Diggle, on the other hand, might be less understanding. This was a very big thing for Lyla to conceal from her husband, and her decisions as ARGUS leader have come between them in the past.
For me, I would say that Lyla did betray Team Arrow, but she also shouldn't really be condemned for it. After all, she's never been a member of Team Arrow herself. Yes, she's been an ally. Her alignment has just generally been with ARGUS. While it was a betrayal, it was for a greater good, and fighting for the greater good is very understandable after what happened to Earth-2.
Well, unlike The Flash, Arrow seems like it has no choice but to continue the build to "Crisis on Infinite Earths" as its main plot in the present. Lyla's secret will have to either come out in the remaining five episodes of Arrow before "Crisis" launches with Supergirl on Sunday, December 8 at 8 p.m. ET, or in "Crisis" itself. For now, you can catch new episodes of Arrow on Tuesdays at 9 p.m. ET on The CW.