Ok so as tradition dictates I didn't get my predictions totally right. We did in fact see Xiao and not some impostor. Although there was an element of being an impostor there right? We only heard him because the true culprit wanted to bait us. So I was right even on that-
But anyway the rest of it seems to be much more spot on. I claimed that we were probably trapped in some dream world and that was really the point of this whole section of the quest. Time is passing differently for different people. Nobody's getting hungry or tired until they saw their fears. We heard Xiao but only because something wanted us to and then we saw Xiao because we were taking control of the dream with our imaginations. Anybody watch the old Freddie Kreuger movies?
On top of that they are using some big words huh? Spatial rift and all. I'd add another fancy word: Time dilation. It seems we thought only a day had passed (because that's literally what happened 
) but Paimon thinks closer to a month while Itto considers it about a week. And we also know Yelan thinks about 2-3 weeks because she claimed we should have starved by now and humans can go without food for about that time. I guess you could bump it up to 2 months based on Yelan's own likely higher tolerance and better health but she'd also have to have figured in the others who are much more civilian so I'd still go with the 2-3 week guess. Not important. Basically this realm is either purely a dream world so something where we're actually all just knocked out (from the fall) and we're just experiencing all this stuff in our heads which explains it all away. But if we're actually in another realm because of the Fantastic Compass/Iron Meteor Abyss from 500 years ago then this could be a legitimate technology that's created something like gravity wells that is causing everybody to experience time differently and also creating strange spatial bridges like what happened to Xiao.
The fear stuff though points more to dreams than any kind of sci-fi explanation. You can't really science fears coming to life out of nowhere lol
BUT 2 things about this quest feel like they're backing me up on my old theory that the Pyro Yaksha was the survivor.
Evidence #1:
This was the whole Domain and it was really interesting and I hope to explore a structure like this again. It was really cool.
But the important part is the colors. Do you notice something? Look at them. Gold, Blue, Purple, Teal. There's only 4 which ok it does make sense because of the 4 cardinal directions. But Xiao's involved here right? And we know the Electro Yaksha died/disappeared down here right? So this has to relate to the Five Yakshas. Count it. Five. Only 4 colors. Which one is missing?
Evidence #2:
Going back to the fear room, how each of them ran from the room, how the room traps you inside in your fear if you actually stay and the suggestion that this place is mind-bending is a heavy reference to Pyro going insane from her overwhelming fear.
Side Note: Also the major enemies in this event not to mention all of the ones in this Domain are Geo based which could be referring to Morax since he was the one who they swore to carry out their duties. So since the Electro betrayed them he'd likely believe Morax would be angry. Or if it's Pyro she'd assume Morax would be angry that she fled. On top of that teal was the hardest section where we were attacked by 2 Geo Vishaps. Teal = Anemo = Xiao who is now the only remaining yaksha after Electro and Pyro abandoned their responsibilities.
Wait but does that mean I'm suggesting it's all Pyro Yaksha's doing? No but maybe she's part of it. I'd squee so hard if we got to see even a small cameo from her though. 
It could be that Xiao was even looking for her and got separated from her. That then led to this madness which is playing off her ongoing psychological issues especially since this place would definitely bring back bad memories being the gravesite of their fellow Electro Yaksha who went darkside.
Just throwing this screen here because it's funny to me they mention ghosts and I was talking about the "ghost" of the Electro Yaksha yesterday.
In the end though I still believe this is caused by the missing Fantastic Compass. Maybe it's even the purpose of the compass to guide people to their paths. And since Pyro's too fearful to do so it's created a fear Domain to force her to confront them. (and unfortunately by extension all of us got dragged along for the ride)
But I mean it could still be Electro. There's another hint that leaves either yaksha still valid here.
Notice why we fell. It was handwaved as "elemental energies" but which elemental energies? Itto's and Yelan's. Geo and Hydro.
Imagine if there's a thing preying on your fears and then you experience another Geo powered person fighting another Hydro powered person. I might overreact too. 
Ok theory time over. Observations time.
It looks like yaksha don't actually bleed. So in the teaser when the masks all show bloodstains except Xiao's that has to be purely artistic then which helps show that 1 of them is still alive.
Our MC called this the Abyss but it's definitely not the Spiral Abyss (where's the moon?) and it definitely looks more like the night sky. There's theories about that.
Also why a hole? Could that be something that happened to the twins on their way out of Khaenri'ah?
The controls for the light beam things was atrocious. I get that they have to take into consideration PC and console players but on mobile you could totally allow two finger rotation. Also why couldn't we move diagonally? Also also why did they move so slow? I really liked this Domain's idea but the controls for the light things needs more work for future reuse. (please reuse it! 
)
Finally Itto and Paimon share a birthday! And it was today. They started out making fun of each other and now Itto's taking care of her. I wonder at the end of this will they actually acknowledge that? It is a permaquest so it wouldn't work out if somebody ended up playing it in the future but it would be cute to have them mention it since both of them have been vocal players in this quest. Seeing how they are getting along now they should totally have a combined bday party after this. I mean even just make it part of the event itself so it isn't part of the quests.
Anyway one can dream. I'll see you guys for the finale tomorrow!
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PS: And again since this quest is being broken up into parts of an event really it doesn't make sense continuity-wise. We're getting out each time. That shouldn't be possible based on the story but it has to be possible for gameplay or else we'd end up missing days of commissions and resin. What I'm trying to say is there was no reason to break up the quest. The actual event Domains have nothing to do with the quest so they could have just had them separate. We've had events where the story and the actual challenges were totally unrelated.
If we were able to do the full story at once the idea of being stuck down there works out. In fact they could have temporarily disabled our ability to teleport out and make it really scary not to mention claustrophobic which fits so much better with the theme of the quest.
