I think the reasoning behind the title can explained by looking at Shiro's character profile in FMW3. Sanbondo mentioned that (sort of spoiler for FMW3) Shiro is the familiar of the culprit, an original character capable of manipulating dreams. The OC's connection to Yuuka also hints towards setting up the final stage in the Dream World, and more Lotus Land Story characters may show up. Sanbondo had decided to go with an original character so that we can have most of the characters on the player's side against the final boss.
It would be interesting to see how they plan the lead-up to the final arc. The dream concept opens up a lot of different possibilities for how things branch out.
Actually, since Hopeless Masquerade gets mentioned in Eternal, it is possible you might meet characters from there and earlier.
I haven't played the game for ages, where was it mentioned? I do think Kokoro and the mask of hope would be a nice option for resolving Koishi's "arc"
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