I feel it does cheapen Rey’s arc.
The point is that her being Palps’ granddaughter is to set up the lowest point for her at the end of Act II, when she exiles herself under the belief that her being Palps’ granddaughter means she is meant to turn to the dark side, until Luke has that pep talk with her. Undoing that is like revealing Owen and Beru were alive all along which would ruin Luke’s arc.