I think the real atelier meister encountered a house spirit of this place in the guise of an old lady. She asks him to free somebody from this place, but does not recognize the name "Hildegard", which means that either there is a whole lot of people imprisoned in this place, or Hildegard has many names. Both options seem likely.
Meanwhile the fake atelier meister (actually an illusion controlled by the princess) is busy with complicated negotiations with the feudal lord. He is now "alone" with the feudal lord, and feudal lord seems interested in conducting some dangerous research - research involving immortality. It seems to be quite illegal, since the feudal lord could not do it with Princess present.
But of course, the Princess is present - she is the one controlling the illusion. While also hiding her real body, and having a sleeping illusion of herself in another room. Even if it's a sword that Kuruto made, the princess got really good at using its illusions. And so, I guess the feudal now risks being arrested for heresy or something.