[quote=@Stern Algorithm]
Question: should NPC's have 'memories' of Yggdrasil? For example, should Lexus realize that the new world is not the same as the Yggdrasil world based on names of countries, geography, etc.?
[/quote]

The NPCs do have 'memories' of Yggdrasil and should therefore act accordingly.  Having [i]lived[/i] in the world according to whatever backstory and lore the player character gave him.  The NPC then kind of fills in all the gaps left out by the player given lore, meaning there will be quite a few things about NPCs that even their creator wouldn't necessarily know about.