I don't know enough of the overall Idola story to make accurate guesses, but from what I understand the "protagonist" from PSO2 does not appear in the game while PSO2 characteras seem to be showing up.
My guess after Episode 6, something happened which caused ARKS to scatter and that the NPCs are showing up in Idola while your character sleeps soundly and maybe hurtles off into space as a meteorn.
Yes, both protagonist from PSO2 and PSO2es didn't show up in Idola but their partners (Matoi from PSO2 and Jeanne from PSO2es) showed up.
Other than Luther, most PSO2 characters that show up and playable in Idola were women (we know the reason why).
In the last story that I follow from global version was :
Quna, Matoi, Jeanne, Seraphy / Phuramy, and Risa (Harriete mode) were joining forces to stop Luther's plan.