Fair enough, I read "not great" as being harsher than you intended
Huo Zhoung is not a great parent.
Because he lacks the temperament and the skills for it.
This does not make him a bad person, potentially a bad parent in the same way that i would make a bad car mechanic (i can do some basic maintenance, but if there's anything really broken i so very much am not your go to person).
There is more to parenting than loving your children or trying your best to support them.
Parenting is a skill, and it comes easier to some than others, and some people will never learn it, and i suspect Huo Zhoung, thanks to his cultivation, is simply in that last category.
And, in a way, he has made the best possible decision available to him.
He has decided to find someone else who can learn those skills, who can be the parental figure Meizhen wants and needs, and support her from the shadows to best of his ability.
Which makes him actually a pretty decent parent, while being a bad "parent".
I may lack the terminology to explain myself properly.