Treat guest with grace — it's not all bad! (7,3)
I believe the answer is:
curates egg
'it's not all bad' is the definition.
(I've seen this before)
'treat guest with grace' is the wordplay.
'treat' indicates anagramming the letters.
'with' is a charade indicator (letters next to each other).
'guest'+'grace'='guestgrace'
'guestgrace' anagrammed gives 'CURATES EGG'.
(Other definitions for curates egg that I've seen before include "Something good in parts" , "I'm good, but only in parts" , "A thing good in parts" , "Get ace rugs (anag)" , "Something partly good / bad" .)