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Acceptable Breaks From Reality: Most of the complaints about the film can be explained by this trope. The movie wouldn't be a Tear Jerker if it took six months of paperwork, 7 years for the kid to come of age, 5 years for him to be accepted into Julliard or longer for August and his parents to all reunite.
Misaimed Fandom: The creators of the movie intended it to play particularly well to music-lovers. It turns out, though, that the less knowledgeable you are about music, the more likely it is that you'll enjoy this movie. For classical music fans, it's nearly impossible to get past the massive amounts of Did Not Do the Research in terms of how fast August learns things (natural talent at creating music is one thing, magically knowing where to put your fingers on a guitar or how to read music is another) and his reception by the larger music world.
Moral Event Horizon: Lyla's father. Not only does he keep her from her boyfriend due to him wanting to keep her on a path where she had no freedom to do what she wanted, he sent the baby to an orphanage after it was born (while Lyla was in a coma) and said that it had died.
Sanity Slippage: It's possible that Wizard was not necessarily a Complete Monster, but a person who was slowly losing it due to rough childhood, poverty, and general disillusionment with the world. It's even possible to craft a possible backstory to him, given hints from the movie.
Based on his rant to Jeffries about what child protective services "really does", it seems he has personal experience with that situation. Plus the film seems to hint that he has been a street performer for a long time now, which doesn't pay well, and may have been why he took in all the other runaways in the first place, he may have genuinely believed they'd be better off with him than alone. Of course, it also appears even at his initial meeting, that he is a little unhinged, and the prospect of August being his "ticket to riches" (and then losing that prospect) just drove him deeper into madness until even Arthur (who seemed to think well of him at first) knows he needs to be stopped.
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