What's the work?
RWBY: Before the Dawn is a 2020 novel by E.C. Meyers that takes place in the RWBY canon and is a sequel to 2019's RWBY: After the Fall.
Who are they?
As you may recall, we had two PEs from the previous book: traffickers Carmine Esclados and Bertilak Celadon. Well, we now get more info about them, as well as who they're working for. Carmine and Bertilak serve a secret terrorist organization called The Crown, led by twins Jax and Gillian Asturias, which seeks to topple Vacuo's government and restore it to a monarchy (the twins believe they are descendants of royalty and that it is their birthright to rule Vacuo). Their plan is to kidnap people with powerful or useful Semblances (including children), and do one of the following with them: 1) use Jax' Mind Control Semblance to make them into Crown soldiers, or 2) Have Gillian use her Aura Siphon Semblance to drain them of their Aura and give it to Crown agents, essentially using them as batteries to power the Crown's Auras.
Why they no longer qualify
TL;DR at the bottom.
First we'll cover Bertilak, the most straightforward cut. After their failure in the last book and subsequent escape from prison, Carmine and Bertilak returned to their bosses. Carmine blamed everything on Bertilak, and as such he was punished by being constantly drained of his Aura, leaving him essentially comatose for almost the entirety of the book. After the heroes liberate all the other people being held and drained, Bertilak renounces the Crown, and assures the heroes that he will not fight them. He gives them the password to hack into the Crown's private communications, then leaves on his own to find and get revenge on Carmine. Though this is far from a full redemption (he doesn't help save Velvet from a cave-in even when asked, and otherwise feels no remorse for his crimes), he still decides to spare and even help the heroes, though admittedly due to a "my enemy's enemy is my friend" type reasoning.
Carmine is also a cut. At first glance, it seems like they make her even worse: she betrays Bertilak, has at least two confirmed murders, and very nearly murders Coco and Yatsuhashi, all while continuing the trend of kidnapping and torturing people (again, including children). However, unlike Bertilak, Carmine doesn't serve the Asturias twins for the money per se, but because she actually agrees with the idea of a monarchy and truly supports what the Crown is doing. This includes legitimately befriending the Asturias twins. To quote the book: "'Carmine always had a soft spot for the Asturias twins,' Bertilak explained. 'She used to call Gill 'Queenie' in school. She bought into their whole royalty thing big time. I think she just wanted to get as far from the Atlesian way of life as possible.' He laughed. 'Ironic that she left Atlas so she wouldn't be pressured into joining their militia, but here she is, part of another dictator's army.'" And we do see that this loyalty is genuine, as, when the heroes cause the aforementioned cave-in to try and stop Carmine and Gillian, Carmine uses her Semblance to throw Gillian to safety before the cave collapses, saving her life. Although everyone thinks Carmine was killed in the cave-in, Bertilak thinks she survived and fled, and goes off to find and kill her.
The third point to bring up is that Carmine and Bertilak also get cut due to the heinous standard being raised. While they're still up there as some of the worst, they are now overshadowed by Jax and Gillian Asturias, the leaders of the Crown that brainwash and kidnap people (constantly draining the latter), all for the purpose of launching a Battle-of-Beacon style attack on Shade Academy.
TL;DR Carmine and Bertilak have redeeming qualities and are now overshadowed by the heinous standard. "Cut" for them.
An unfortunate "cut" for both.