I almost typed up and extremely autistic post detailing this theory, but I'll try to simplify it to just be moderately autistic.
Manhattan is not the actual villain, but the writers are setting him up as to lead us to believe he is.
What would Manhattan's motivation possibly be to alter the DCU? He was consistently shown in Watchmen to be generally benevolent, if somewhat apathetic and disillusioned.
Now the rest of this is projection and not even a theory:
The actual villain would have to be an even bigger deal than Manhattan, who already kind of tops every previous multiversal/event villain in that he's not even from the DC multiverse and from a sacred cow of a book like Watchmen.
So the most prominent alternative that comes to mind: Empty Hand. Now, the way I interpreted EH is as the hand of the editor/writer that controls and resets the Multiverse to appease the Gentry/fandom. Many feel that Multiverse-2 is supposed to refer to Multiverses outside of DC, but I think it simply meant the pre-Flashpoint Multiverse. Empty Hand will eventually come for Multiverse-3, or the third iteration of the Multiverse, or our current one.
This is where Manhattan comes in. He actually took ten years from the DCU in order to SAVE it from destruction. Younger multiverse = less continuity = more #1's = satisfied Gentry.
Now there are also a lot of meta-implications that come with the use of Empty Hand with a seminal work like Watchmen, which is another reason I think they chose Manhattan.
That said, maybe Manhattan is still the one killing those who could try to interfere with the timeline and expose his whole plan, because they risk bringing the Multiverse closer to destruction.
My other theory is that Mr. Oz is, in fact, Manhattan himself, who has been significantly drained from altering the timeline. "Oz" could be a shortening of "Osterman", Manhattan's name before he became Manhattan.
Again, this is all autistic funnybook analysis.