I am back from my Nerus marathon with some 9 pages of fully incomprehensible notes including such gems as "Nomino Mpreg"
Given the difficulty of chapter 2 I feel like theorycrafting is a bit in vain? The mysteries revolving around soul amnesia and the strange visitor in the prologue have been exposed. Little thinking is expected of me and I am dumbTM.

And if any of this feels rough, yeah the notes were ...worse. I tried my best to make sense of them, blame sleep deprivation.

So first my theory I was running with up until I read this last chapter:

So just going off memory I was more or less running under the assumption that Shax/Obli would essentially be weaving in and out of different timelines to find Neru Magus’s soul after losing his “accidents” through some unknown circumstances. Possibly after going hollow and reviving through some unknown method X which perhaps involved devoting his eternal life to doing the same with Shax, perhaps not fully grasping what he meant at the end of the prologue where Shax revealed he wasn’t a shapeshifter, and working under the assumption that Shax was still a second generation soul amnesiac. And I was using the surface level similarities between Neru Magus and Alessia as my reasoning for this, alongside her remembering the same memory of the angel, that soul that appears while she investigates William’s study, etc etc.

So with that rejected theory let's move onto another obviously incorrect theory which could at the very least spark some interest from other readers who haven't stopped thinking yet:

Obli/Shax played a role in whatever apocalyptic scenario takes place at the end of August 3041 AD which in some way factors into creating another breach and allowing Neru Magus to escape. Over the 1000 years or so it has taken to enact this, this person has shed their personality as Shax/Obli as a way to disassociate themselves from any acts of cruelty necessary to free Neru Magus. In the mean time in the void Neru Magus has done the same and became this burned man, perhaps going by the name Pyr. PyreMaybe in some way resents Shax/Obli for their actions which may have resulted him using the Time Egg to attempt to delete the earliest scenario, this being the  Red Manor that was alluded to in the prologue and seeming appears onscreen briefly whenever we start a new game. In effect the carcass is an extended confession of Shax/Obli's role in the events of August 3041 AD and PyreMaybe wanting to reject it and perhaps any lingering feelings for Shax/Obli.

Now this granted doesn't explain how Alessia manages to remember Neru Magus's encounter with Obli. Unless we assume that Neru Magus did procreate off screenwhere as the whole idea of passing ones genes down and parent/child relationships seem to pop up a lot. But it felt too obvious but lacking in any evidence. Granted last time I thought something was too obvious, Frank turned into Obli.

So now onto my flawed reasoning.

The backlog editorializing I think we can assume to be PyreMaybe looking back on past mistakes. And while no vitriol really is aimed as Shax, what little of the backlog text actually mentions Shax doesn't seem especially loving. Backlog editorializing in the Prologue primarily focuses on Neru's point of view directly rewriting the events of the Second Battle of Aoens and Shax reviving. One of the earliest instances of the backlog shenanigans includes Neru saying that he didn't want to lose Shax and commentating on how dull and listless his everyday life as a Great Shapeshifter is. Assuming the backlog stuff to be diegetic, and given how the life egg has been introduced now, I think it is; I think it safe to assume the Burned Man is Nerus.  Also Neru Magus and Obli seem place very different weights on what a person "is" and how much their memories influence that as seen when Neru Magus comments about how he loves Obli regardless of what he is. And Obli really does not see it fit to let Shax die in any capacity, and so maintaining his memories was crucial. it just also seems like framing his entire existence of being for the sake of Neru Magus seems like its setting up for something bad. Maybe resentment is mutual. This is my reasoning for the "Neru Magus is Pyr, maybe and resents Obli" theory.

 
Neru Magus was hesitant to join the descendents on the battle field. This has more to do with how ridiculous the plan sounded on face value than any moral obligation not to kill other shapeshifters but still he essentially died to his knowledge in a plan concocted by Obli. He might feel guilty about that. Love to send my boyfriend to die. Obli expresses conflicted sentiments regarding the ethics of his desire to live a happy future with Neru Magus. After accepting the soul of the Aeon he acknowledges that he doesn't want to kill mortals to save Nerus but seconds before was admitting he was considering starting a third battle to create another breach. And before then he had his whole monologue looking back on whether or not he had really made the correct decision regarding the second battle and how their happiness would inevitably be built on the deaths of shapeshifters and ruin of the planet. Furthermore in chapter one, Aloy's summary of the museum murder felt meaningful. Particularly when he hit on how the young lady had no real reason to commit murder herself but her circumstances lead her to be easily influenced. Neru's death and Nomino's insistence could have directly led Shax/Obli to carry out the events of August 3041AD.  I considered this my evidence towards: "Shax/Obli aware of the ethical issues but pursuing destroying the world anyway" theory.

With Shax and Obli literally being two people and the similarities between Neru Magus and Alessia I think its been established that people can have mulitple personas of sorts.  Given how much emphasis is placed on the importance of memory as a defining factor in ones sens eof self coupled with Neru Magus's implied memory loss we can assume he lost himself in the void in some way. This is my basis for that "Guilty Shax/Obli dissociation" and "Artist formerly known as Nerus" theories.

Finally the red manor exists. Neru Magus has no memory of it. Shax doesn't seem to either. though Nomino does. It seems to correspond to the scenario which never fully deleted from the time egg. This is my basis for the "I know what you did at the Red Manor" theory.

Now some odds and ends that seemed thematically important in my notes:

Sofía talking about how the bifurcated snake after being torn is still connected and indistinguishable.
Neru Magus promises to make many happy memories with Shax before the Battle and Obli/Frank and Alloy seem to return this favor to Alessia by maybe revealing where her father could be.
Alessia "sees herself" in the characters in her dreams
Is Shax meant to parallel Nomino in some way?