Episode 5 ending (obviously contains spoilers)

Am I the only one that thought everyone was overreacting to the subordinate from Cuento's analog showing up? Given that we know that most people we've seen in Omega are analogs of people past and present, the majority with a connection to the Oracle fleet, why act as if some emissary of a Dark Falz just waltzed in?

He wasn't threatening, there was no monologue... Just an invitation from someone acting rather oddly. Further, no one indicated sensing any F-factor shenanigans, no one seemed to have a clue who this was beyond "wait, weren't you from Omega?", and yet everyone acts like someone came in talking about dark powers or such.

Additionally, when Shiva was waiting in the shopping plaza, everyone was acting like they were threatening people or radiating negative photons when there was little that was ominous until the "I will destroy the universe!" bit. Which came after Xiera called the 2 most powerful people not present who immediately attacked despite also having no idea what was going on or who this was.

I know their apprehension was justified after the fact, but that doesn't change the fact that they had little to base it on before attacking.

If we were supposed to quickly reach the "that's a villain!" conclusion, wouldn't it have made more sense to put the "Destroy the cosmos!" bit before the "thank you for releasing me" part?

Part of the mystery and surprise is that Omega is the "memory" of the universe in a sense. It is the encapsulation of everything past, present, and future in the universe of Phantasy Star Online 2 that even happens to bend over and veer into crossing into other games' lore and territory for a few references and nods.

The surprise is largely that Omega, being a sort of "recollection" of the whole universe was not intended to have anything "come out" of it despite the fact that the player can go in. With that in mind you can most definitely argue that seeing someone who showed up out of seemingly "nowhere" is suspicious on its own. But at the same time, the lack of any hint of Dark Falz energy or presence is even more alarming. I will leave that there due to Episode 6 (early Episode 6) going into detail about it if you did not yet see or realize who these new threats are.

If it were more of a happy ending sort of deal I would have imagined that everyone who showed up at the end would have been more grateful, welcoming, and even happy to see the protagonist but these new characters most definitely gave off an uncanny air of "welcome to our world" when they are beyond your doormat.

With the hints dropped on late Ep 5, it's pretty clear who we're dealing with. Still, my opinion that their reactions (particularly Xierra, who I generally kinda like) seemed more severe than warranted given the available data.

Justified after, and given who that is they weren't nervous enough

I actually got to that point of the ending in the Global version and realize where you confusion now comes from. I played using the fan-translation originally so the closest to what I recall.

Episode 5 Chapter 6 - "One legend ends, and another..." (2:54)

In the fan-translation I never had the impression that upon seeing Shiva that she was there to be "friendly" and that there was definitely something uncanny about the way Varuna behaved as well. In the global version (using only the text because I still play with the Japanese voices) a lot of the writing and vocabulary seem to be less clear about how this particular encounter was one that was not only unexpected but also very suspicious.