In حُسْنُ الْخُلُقِ, الْخُلُقِ means character; in الْخَلْقُ عِيَالُ اللَّهِ, الْخَلْقُ means creation. Do not give them one meaning merely because their unvocalized letters look alike.
Teaching example: someone provides water for an animal. This illustrates attending to a creature’s need. Creation receives provision from Allah; do not turn that relationship into kinship. The report encourages kindness without this example deciding a particular person’s final standing with Allah.