The best interpretation of the paradox in the phrase “I must be cruel, only to be kind” is:
Hamlet intends to do something that would typically be considered heartless, but he is actually doing it to be helpful and considerate.
This response captures the essence of the paradox, as Hamlet is torn between the necessity of his harsh actions and their ultimate intention to achieve a greater good or to bring about a more positive outcome, even if that means initially being cruel.