There is no problem if God is not required to be all-encompassing in every way..
Suppose we grant this. God is infinite in only one regard, just like an line that is infinite only in the direction that it is moving in.
The problem of separability of God from the universe remains a legitimate one. Suppose God is the primary entity of the universe or the first irreducible entity. Suppose also that God and the universe are distinct. In that case, did the universe come into existence on its own right. (Came from nothing, therefore was not created by god and hence the principle of creationism is rendered false.) Or is it the case that part of God was used to create the universe? In that case the universe and God are not separable and it is a mistake to maintain that God can be all good and the world evil.
That is very troubling for conventional theologies because they do indeed maintain that God is all good and the world inhabitants evil and thereby insist on the separation between God and the world.
Again, never mind the argument about infinity, suppose God is finite or only partially infinite. How do we deal with the separability problem that I outlined above.
In summary, it entails two potential problems.
(1) The universe was not created by God and hence orginated on its own right and one that is completely distinct from His creative fiat.
(2) The universe is part of God, therefore God cannot be all good and the universe evil. That is the case because the universe originated from God, therefore every property that the universe has (wickedness in this case) derived from God and therefore constitutes a part of his identity.