in principle, it makes sense, but I think that for this, demons should be introduced as a separate city (which is not allowed by the first rule of the topic) (but their city would be more logical, especially since there are a couple of ideas)
if we proceed from your suggestions, then it can be done so that after Saref took the skull, he was teleported, and the demons remained in Shio, but the Dungeon began to weaken (just about 200 years later and it will collapse)
how about this option?
Auto-translated