The FFH wikia claims that Arawn is the patron god of the Sidar. Surely by defying death the Sidar are defying Arawn and the natural, spiritually humbling mortality of all things which I would imagine he represents. Why would the Sidar of all peoples revere the god of something which they at such pains to avoid? My guess is that it was Arawn himself who had mercy on the first shade's desire for immortality and made possible the Sidars' sidestepping of Arawn's domain. So therefore the Sidar are eternally indebted and reverent towards Arawn despite the apparent contradiction. Also, maybe the Sidar are in a kind of halfway house between life and death, so they feel themselves closer to Arawn.