When discussing with Yan Jiayu previously, they mentioned the issue of time within the instance. Xu Huo leans towards the idea that the time within the instance roughly matches the outside, while Yan Jiayu speculates that the "one month ago" mentioned in the game's background is not literally a month ago, but rather a reference point.
Regardless of the situation, it was discovered early on that it was true the Queen could make puppets and had made a deal with the King. At least the mine exists.
Some of the fixed instances in the game occupy certain areas, like the Rose Castle, or instances like Base W37 City and Twin Cities, which are fixed in a real-world location. This fairy tale instance, however, is somewhat like a mobile instance, connected through a passage. But this doesn't mean the instance world doesn't exist; rather, it exists in a separate space and doesn't seem to connect with the district space when opened.
