This is situations for the AU kathlynthe14th claimed from me! The name 'Sky People in RQ' was a little long, so I called it the 'Sky Lantern' AU here for an easier time typing, Kathlyn gets to decide if they want the name to be that or not. Enjoy the shenanigans!

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(Orange Leader finding out about the lantern full of people after Orange Steve brought it up after Sabre got mad at them for keeping the secret that Orange is most powerful and not the Leader.)

Orange Leader: You... you have a lantern full of your people's souls and you can just... call them?

Orange: Yeah, he pulled out the lantern and opened the little door on it, then hundreds of spirit-looking things popped out and fought the Darkness!

(Orange turns to Sabre)

Orange: Like, what the heck, dude?!

Sabre: Well, you didn't tell me you're the most powerful Orange Steve! You've been keeping secrets from me, man!

Orange Leader: Wh- so are you!

(Moment of quiet, then a Sky Person opens the little door to the lantern and pops their head out.)

Sky Person: ...Well it seems both parties have some explaining to do here.

Sabre: *Sigh* Go back in the lantern.

Sky Person: Hehe, okay.

(Sky Person goes back in the lantern and closes the door, and the Orange Leader looks confused and points at the lantern.)

Orange Leader: ...What the-

Orange Steve: SEE?! I told you!

(Shy hiding on the stairs is the background.)

Shy: ...What is happening.

—

(Yellow Guards trying to get Sabre and Orange to follow them.)

Yellow Guard 1: You will come with us. Either willingly or by force.

Orange: Nahh, I think we're good.

Yellow Guard 2: (Stepping forward) It isn't a-

(Sabre holds up the lantern, and the Sky People suddenly appear behind him. The two guards freeze.)

Sabre: Uh, yeah... I don't think so.

—

So, I thought of two ways the 'First Death' scene with Nightmare can go (Kathlyn might make something else happen though, they can do what they want with the AU). Either it can go like how I mentioned in the oneshot, where the Sky People block the lightning strike and fight the Darkness and Nightmare like two gangs in a dispute, or... something else.

What if the Sky People can't get out of the lantern, and Sabre dies, dropping the lantern onto the ground beside him. The lantern's door pops open, and out go the Sky People... only to see Nightmare standing in front of Sabre's remains, the Orange Steves terrified in the background surrounded by Darkness.

And the Sky People. Go. Mental.

Aka: We all go "LET'S MCFREAKIN' LOSE IT!"

The chaos can be heard all across the Realm, as mayhem and devastation erupts from the Orange Village. Yellow Steves run back to the kingdom, unsure of what the deafening howls and screams are. The people of the Red Kingdom quickly run and hide in their houses, thinking they've been found. Green Steves take cover in the forest. Blue Steves panic and run to the spirits, worried that a rift to the World Below has opened. Indigo Steves immediately teleport to individual safe rooms inside their homes in the Middle World. Violet Steves freeze in fear of the unknown wailing and shrieking, as it can even be heard in their dimension. 

The First Curse is trapped inside the Unnamed Armor, when he hears the anguished rioting and wonders, "What the f#*% is that?" while trying to figure out if it's just him or it's actually happening. Galaxy is minding his own business at home, when the screams suddenly pierce through the sky and make him drop his sandwich in surprised fear. Even Origin is wary of the uproar coming from the people of his Creator, as he slowly closes the viewing portal he was looking through and contemplates if he's allowed to step in or not.

Eventually, Nightmare teleports back to his lair with the few Darkness that survived the loss-fueled rampage, still holding the Orange Steves hostage and taking the Orange Steve we know as well. However, a few Sky People follow him and keep trying to break in so they could try to take a form of revenge.

Meanwhile, Sabre arrives in the World Beyond, at a place the screaming isn't heard yet, with the Blue Steve waiting for him (the one that gets turned into Soul). He takes Sabre to his friend's house (the future Leader), after Sabre begs him to try and go back to the Overworld, saying "They're going to wreck so much of the world if I'm not there to stop them". Blue Steve, confused and irritated at his pestering to go back, arrives at the house atop the hill there, only to then hear the otherworldly shrieks.

"Oh no, they've already lost it." Sabre mumbles as he covers his ears.

Eventually, after a Sky Person or two breaks into the World Beyond to ask for Sabre back, Blue Steve basically just shoves him through the portal after warning him about the World Below deal, not wanting the Realm to have to deal with this absolute chaos anymore. As soon as Sabre arrives back in the Orange Village, everything suddenly goes quiet and still, the Sky People returning to calm, while the Sky People that followed Nightmare temporarily go back to the village at the news of Sabre's return to the living world.

Oh yeah, and we all totally make a death march with Sabre over to Nightmare's lair and then beat the bejeezus outta the bee man.