Why were Mordo's group of heroes so disastrously overconfident in confronting this enemy?

Question

In Doctor Strange In The Multiverse of Madness, Mordo reveals a group of heroes who are sent to confront an enemy who has intruded from another universe.

The individuals involved are:

Black Bolt, Captain Carter, an alternate version of Captain Marvel, and Mister Fantastic confront Wanda Maximoff, possessed by The Scarlet Witch from our universe.

The group are dangerously overconfident:

CAPTAIN MARVEL: "Oh, we can handle your little witch if she decides to Dreamwalk."
MISTER FANTASIC: "Black Bolt can destroy you with just a word from his mouth."

And suffer severe losses in the battle that ensues:

Wanda Maximoff, possessed by the Scarlet Witch, murders the four of them in short order.

Given the intelligence, experience and sagacity of this group of heroes, why were they so disastrously overconfident?

Answer 1

In their own universe (which they describe as 838), this group — the Illuminati — have already killed their version of Doctor Strange, who destroyed an entire universe while using the Darkhold to Dreamwalk in an unsuccessful attempt to find a way to defeat Thanos.

Based on their experience with him, they consider our Doctor Strange to be the most pressing threat to their universe, and don’t seem to trust him enough to consider his warnings credible*. They've already subdued him using the Sands of Nisanti, which they've incorporated into manacles, so they've got some expertise in combating magic.

Meanwhile, their version of Wanda Maximoff is happily living in the suburbs with her children. The Illuminati don't indicate that they've had any contact with her, so they may not be aware of her existence. Even if they are, this universe’s Darkhold is protected by its Sorcerer Supreme, Mordo. Our Wanda unlocked her Scarlet Witch-level power after reading the Darkhold; 838 Wanda does not seem able to match her, based on their encounter at the end of the movie, and so probably isn’t as powerful.

The Illuminati are also implied to be arrogant, rather than sage. Their Doctor Strange, who founded the group in the first place, admitted his use of the Darkhold, and re-joined them to obtain the Book of Ashanti and defeat Thanos on Titan. Despite this, they still executed him in cold blood, and built a statue to convince the common folk that he died a hero.

This is a group who staff their headquarters with Ultron robots. They’ve likely taken the ruthless option more than once when carrying out their founding purpose of making difficult-but-necessary decisions. The threat from our universe's Wanda probably seems no worse than their previous experiences, making them confident in their ability to deal with it. They've never come up against a magic user this powerful, determined, and ruthless before.

_{* Aside from Xavier, who suddenly trusts him once everyone but Mordo leaves the room, although not enough to help him escape or anything. Great to have you back Charlie.}

Answer 2

From the information they currently have, their assessment is correct.

1. It's unlikely 838-Wanda has shown her full powers

We don't know much about 838-Wanda, but from what we see, she certainly has powers - she starts to use them against 616-Wanda[*1] in the finale[*2], and she uses them to escape the Waypoint. But, she also has two children (which are real), and she didn't appear to feature in the battle against Thanos. So they probably don't think base-level Wanda is that big a threat.

Even outside 838, we've only seen hints that Wanda is very strong. In Civil War, the two sides seemed fairly balanced, and in Endgame Captain Marvel seemed to cope with Thanos about as well as Wanda did. In What If? we see Hulk fight Zombie Wanda fairly successfully. There have been hints that she is stronger than that, but nothing confirmed. I suspect 616-Captain-Marvel would feel she could take Wanda too. Certainly as a viewer, based on the Inhumans show and the X-men movies, I thought Black Bolt and Charles Xavier were going to win against her.

So, from their perspective, there's no reason to think Wanda herself is a huge threat[*3]

2. They haven't experienced the power of the Darkhold

838-Strange used the Darkhold, but it seems all he really did with it was dreamwalk to other universes - which he used to observe, rather than actively cause violence. Once he triggered an incursion, he admitted his use of it, and submitted to his friends' judgement. While the Illuminati understand the Darkhold is dangerous, they don't have experience fighting against it.

3. The Scarlet Witch appears to be more powerful than other Darkhold users

We've seen several people use the Darkhold - Agatha Harkness and several Stranges in the MCU, various others in non-MCU Marvel shows. It appears the Scarlet Witch is something different to them. She outmatches Agatha with ease, and has a shrine in the original temple. At the time this scene happens, 616-Strange, Wong, and America, are probably the only people in the multiverse who understand how powerful the Scarlet Witch actually is.

4. Black Bolt can defeat a Darkhold-wielder

The Illuminati agree to execute 838-Strange, and Black Bolt does so by merely whispering. So Reid is completely correct in what he says. All they need to do is hit Wanda once with Black Bolt's power, and she's dead. Of course, 838-Strange wasn't fighting back, but they do know defeating Wanda is possible.

5. 616-Strange is their main concern at that moment

838-Strange proved that, simply by just observing another universe, he could trigger an incursion. From what we're told (and see later), that kills (almost?) everybody in both universes - trillions upon trillions of people, nearly four times the threat Thanos posed. By merely remaining stood in front of them, 616-Strange is increasing the chances of that happening with every second. 616-Strange is trying to convince them to keep increasing the risk of an incursion, and hand over one of their most powerful artifacts to him, because of a slightly-vague threat from something 616-Strange thinks is even worse. The Illuminati's dismissal of his words seems more like an attempt to keep the focus on him, rather than get distracted by another threat.

Conclusion: The Illuminati weren't overconfident, but made a sensible assessment of the information they had

616-Strange is presenting two options: a fight against a Darhold-weilding magic user, or an incursion. The Illuminati, who have experience with both, decide the risk of the incursion is more serious than the risk from a single witch, and dismiss Strange's words. It turns out the Scarlet Witch is far more powerful than they realised,

[*1] I've seen arguments about which number the main MCU is, but 838 called it 616, so that's what I'm using here

[*2] I assumed when watching it that the climax battle happened in 838, but I've asked another question about it

[*3] I don't immediately remember if 616-Strange says its Wanda, rather than just "a witch". The prospect of Agatha Harkness attacking does not seem at all scary.