A) if Nicole Kidman wants to be in your movie, you let Nicole Kidman be in your movie, but imo her specific work does give her an uncanny quality that functions well in eerie settings
B) the witch only has about 20 seconds of screen time total, during which she is supposed to be impactful & terrifying. Casting an abnormally beautiful woman who looks completely augmented & bizarre compared to the rest of the cast was deliberate. The witch is not of the natural world and therefore contrasts harshly against it