Resolved in 0.13.1a. The party is force-returned to Aliron and the dungeon does disappear when 'the entity' is defeated, so the place cannot be further explored/looted, but that's a lesser issue.
I'm stuck on the vesperine cage, I don't know how to craft it. (Yes I skipped through the dialogues without reading them).
You literally craft it in your forge, Pretty sure you need adamantine, so be ready for that.