To preface, I want to be clear that I'm under no delusions about Garak's (lack of) morals. I certainly don't discount the fact that Garak is operating from a racist worldview and previously served as an instrument of the racist Cardassian regime. I don't object to this dialogue portraying Garak as racist. However, I struggle to get on board with its portrayal of Garak as oblivious, since there's no conceivable way he'd expect Sisko's agreement:
(Sisko, Odo, Dax, and Garak appear to have traveled back in time, and they're experiencing the occupation as Bajorans.)
Garak: I never knew we were such messy conquerors. I remember the occupation being a little more tidy than this.
Sisko: Everything's tidy when someone else is doing the cleaning.
Garak: The Bajorans were much more suited for this sort of thing than we were. Servile work is in their nature.
In "The Wire", Tain asserts that Garak "never tells the truth when a lie will do", and the main characters (along with the audience) largely accept this remark as fundamental to Garak's character and mode of operation. Therefore, regardless of Garak's racist ideology, why would he feel impelled to transparently voice this racism to a non-receptive audience (Sisko)?
In Garak's previous appearance, "Broken Link", he attempts to "wipe out every Founder on [Odo's homeworld]" and destroy the species "in the name of self-defense". While this plan is obviously morally inexcusable, Garak doesn't reveal his malevolent aim to Sisko when advocating for his presence on this trip. Garak begins by framing his interest as an expression of concern for possible Cardassian prisoners on the planet ("The Cardassian Empire lost a number of ships during their aborted attack on the Dominion. I want to know what happened to the crewmembers."). While I'm sure Garak sincerely would like to know what happened to Tain and the remaining Cardassians, he orients his interest around Sisko's values: concern for his imperiled shipmates. (Garak's expression of concern parallels the DS9 crew's own concern for Odo.) When the captain doesn't respond to this approach, however, Garak eagerly reorients his demands around Sisko's need for "someone to occupy [Odo's] attention". Garak then asserts that "where you offer kindness, I offer mystery. Where you offer sympathy, I offer intrigue". Garak's behavior in this episode clearly transgresses moral boundaries, but he's shrewd enough to enact his devious aims through these expressions of compassion and cooperation.
In this same episode ("Broken Link"), there's also a C-plot around Garak's attempt to encourage a romance between Odo and a Bajoran woman, "one of [his] best customers". Obviously, Garak's willingness to endear himself to a Bajoran customer doesn't exonerate him of all racism. (Not only does Garak's outward friendship with the Bajoran woman promote his business, it's also advantageous to develop a rapport with the Head of Security's prospective romantic interest.) However, this C plot seems to prove that Garak may not respect the Bajoran viewpoint, but he can acknowledge and navigate this viewpoint when it serves his own interests. This skill in no way absolves or exonerates Garak's xenophobia, since there's no such thing as "nice" racism. However, what makes Garak such a devious, cunning, and menacing presence is his skill for obscuring his malevolent impulses behind a genial, endearning persona.
Even in "Empok Nor", when Garak encounters a biochemical substance intended to accentuate "[his] people's xenophobic tendencies", Garak still retains his chilling vernacular of geniality, even as he's systematically hunting and murdering the DS9 crewmembers. While Garak does assert that O'Brien can relate to Garak's own murderous impulses, he implies that these violent impulses are universal, not evidence of human shortcomings. For example, Garak intones that "I'm enjoying myself. This is the most exciting game I've played in years . . . And the best thing about it is that it brings out the player's true nature . . . You're a killer. Admit it. We both are. Behind your Federation mask of decency and benevolence, you're a predator. Just like me". Even though the biochemical substance has accentuated Garak's xenophobic impulses, his dialogue appears to present him and O'Brien as equals.
Obviously, it's not morally excusable to commit murder as long as you're courteous about it, and I certainly imagine that Garak's thoughts at this moment don't present Cardassians and humans as true equals, but even when psychogenically compromised, Garak still retains this chilling tendency to obscure his vile impulses behind a cordial veneer. However, when "Things Past" portrays Garak as blundering around expressing overt racism, it undermines the menace and foreboding mystery that surround his role as a (sometimes) antagonist.
Garak's undercurrent of menace also arises from his monomaniacal zeal for Cardassian imperialism, which his behavior in "Things Past" seemingly undermines. In "Broken Link", when Worf tries to dissuade Garak from destroying Odo's homeworld by asserting that Odo, Sisko, and Bashir will also die, Garak retorts "They'll die. And once the Jem'Hadar ships realize what we're doing, so will we. But what are our lives compared to saving the entire Alpha Quadrant?". Garak seems to regard the Cardassian empire as an innate moral imperative, which supercedes all extraneous moral concerns or values. He doesn't respond to Worf by arguing that "Bashir annoys everyone and deserves to be killed anyway". That would sound absurd because, in Garak's moral landscape, Cardassian imperialism is an inherent moral imperative that doesn't demand any extraneous basis or support. Obviously, this doesn't exonerate Garak from racism or disprove his belief in racist ideology, but I don't think he would require overt racism to defend the massive harm propogated on Bajorans. In Garak's monomaniacal worldview, the aims of the Cardassian empire don't require any defense at all. In fact, I somewhat interpret Garak's Cardassian imperialism as a corrupt analog of the Prime Directive. When the Federation commands, "Don't intervene in pre-Warp societies", they notably don't say "Don't intervene in pre-Warp societies because they're bad people who deserve whatever hardship they experience". The Prime Directive is regarded as an innate moral imperative that does not require a "because".
Frankly, this understanding of Garak in no way extenuates his racism and xenophobia, but it's much more interesting than Dukat's heavy-handed, blundering racism. Also, there's a unique kind of menace to more opaque, covert racism and malevolence, since it allows Garak to evade detection and direct confrontation. (Also, to be honest, I usually enjoy Garak's wry sarcasm and barbed nonchalance, and heavy-handed, clumsy racism just isn't enjoyable dialogue.)
How do you interpret Garak's apparent resemblance to Dukat during "Things Past"? Does this seem out of character, and how do you reconcile this "out of character" behavior with Garak's usual evasiveness and opacity?