Could liberation be the realisation of this?
Liberation occurs after reality is observed for the first time without the lense of belief. As you know from the Buddha’s teachings, reality is not what it seems, for we provide many layers of assumptions that prop up the world as we know it. To see clearly through the illusion, we must prove these beliefs to be false, using our own direct experience.
I wonder if 'Consciousness' is many "Facets Of One Entity"
In my experience, there is some truth in what you are saying, although your follow up questions lead me to conclude you have not yet experienced your theory. Remember you can not think your way to enlightenment, so just continue to attempt to validate your new working understandings using your own experience.
For the sake of clarity I will leave consciousness out of this post, for its shared definition tends to be misguided at best. Also, I am about to describe something completely indescribable, so please know any description I give can only be partially accurate. Do not try to logically understand what I am explaining from here on out. My hope is that you will read these words, and they will guide you towards what you are searching for. Verify and search your own experience as you have been.
In my experience, the “entity” you are describing is what I will call Source from here on out for the sake of discussion. Source is what makes all experience possible, for all experience is made of it. But unfortunately source is impossible to describe. Here’s why.
Imagine a piece of clay. This clay can be used to create many different things. The clay can take the shape of many things, but no matter what shape it takes, there are limitations of the clay that persists throughout all objects created by it. For one, the color. All objects created by clay will be the same color. Also, you can only create physical objects with clay. You could never make anything non-physical like nothing, sight, or time with clay. Because of that, we would need to make the universe out of something other than clay. But what would that perfect building substance look like?
It would have to have the ability to take the appearance both something and nothing. But to do that, it would inherently be neither. How do you describe what is both and neither something and nothing? It would also have to be property-less. If it had any inherent properties, everything it created would also inherit that trait. How do you describe something that has no properties?
These are the qualities of Source, Nirvana, emptiness.
All sensate experience is born from this Source. All facets of the same “entity” that neither exists nor doesn’t exist.
and that in itself all things from Good to Bad are part of this entity
All of the 6 sense doors arise within Source. Within our 6 senses, based on preferences and desire, we determine what is good or bad. If we desire a thing, it is good. If we are averse to a thing, it is bad. All derive from Source.
and from this the Entity is itself playful,
Otherwise, are we in purgatory held by another consciousness?
Source is not a human being. I would say it is but I would not say it is anything else. It has no qualities. It does not have a personality. It is not a benevolent god that has thoughts and feelings and desires. It is not playful. It is simply the living backbone of the universe, from which all things are derived. It does not have consciousness, and it is not separate from yourself. This “entity” is the totality of everything you are and experience.
and that all actions (karma's) are created by itself?
Yes. All beings come from the one Source. Karma, understood from the enlightened perspective, is simply the understanding that anything you put out will be immediately received by yourself. If you kick a can, you (Source) are also that can, and will be experiencing that kick. When you steal from another, both the thief and victim are the same Source. Every action we take has an immediate reaction felt by our shared core. Once you know we are all the same source pretending to be different people, selfish gain serves no purpose, for you can not gain anything you don’t already have.
In closing, my suggestion to you is this: Observe your experience. All the answers you seek are there. Focus on proving your current belief system to be inaccurate by directly observing your experience. Even what I just wrote above is a belief system. It is inaccurate and only valid (as all beliefs are) when looking at life through the lense of perception. Do not believe any of it. Enlightenment comes most easily when the number of beliefs, acting as barriers, are reduced to as few as you can possibly muster.
I hope this book of a response I provided you was helpful in some way. I pray for nothing more than your liberation this lifetime.