Naofumi unlocks a new curse series, focused less on destruction and more on greed, the people who are close to him, especially Raphtalia, recognize he isn't in the right state of mind and try to get him to snap out of it. In his altered mind state, he can't realize their good intentions, assumes the true Raphtalia had gone missing, and created life in an attempt to bring "Raphtalia" back. Hence, the creation of Raph-chan, who constantly goes "rafu~". On a side note, Bitch princess is dead, and due to various reasons, the other three heroes were all mentally broken in one way or another. On the bright side, they all believe in the alternate abilities of the hero weapons now, and are no longer antagonistic, but on the other hand, they're all mentally broken.