Stormfront was snuck into the Vought master race program as a baby by a misguided but well meaning scientist to troll with the Nazis and disrupt it from within. She quickly becomes the best superhero they've ever had by miles, making an, as yet unknown mockery of the whole master race idea. Vought discovers the truth when she's about 15 and is utterly humiliated that she's by far the best example of the master race they've ever seen in superhero form. As a form of revenge they kill the scientist and any of her remaining family, they also don't tell her who she really is and instead up the master race rhetoric and use her for many of the atrocities committed by the Nazis against the Jews.
Since then, Vought no longer cares about any master race on racial terms, hence Edgar as they realise it was all BS, but it's still a very useful way of motivating and controlling their heroes so they keep up the charade behind the scenes.
Butcher discovers all this with irrefutable proof and makes a big public reveal, leading to Homelander instantly rejecting and trying to kill Stormfront, who survives but goes temporarily insane with the realisation of what she's done. Eventually Butcher is able to locate and persuade her that she'd be a great ally in killing Homelander and she joins The Boys.
