Ah, utopia. Everyone is perky and helpful - or else. It turns out the Avatars were serious about doing away with all conflict. Anyone who causes conflict gets erased by the Avatars.
The sisters are blissful - no more demons! A normal life! Even Paige is happy. She's sad Kyle died, of course, but she knows he went "to a better place." Curiously, Phoebe hears her editor say the exact same thing about a "troubled" colleague who was "gone."
Leo is increasingly convinced something is not right. He gets confirmation from the unlikeliest source - Zankou. The demon whisks him to an Egyptian tomb, which reveals the price of utopia that the Avatars neglected to disclose. It also contains the recipe for the Anti-Avatar potion.
Leo is still suspicious of Zankou, so he goes to the Avatars' secret hideout. There, he sees the Avatars monitoring the world. When they see a person who causes conflict - yelling, fighting, or generally being disagreeable, they cause the person to simply disappear. Everyone who had witnessed the conflict happily went on their way, as if nothing weird had happened. Leo protests, but the Avatars explain that they must do this to maintain utopia. The needs of the many outweigh the needs of the few.
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