After the death of Voidius, Illuminati realized he is underestimating Mario and Luigi. So he sent them here. Luigi was the only hope to put up with the entities here. Many of the entities had captured Mario, Spigi, and Stuffwell.
Explained
This place seems to be some sort of dark endless neighborhood, also known as an infinite suburb. To make matters worse there are 3 species to panic about. They are Striders, Watchers, and Swimmers. Once entering this place, you are completely open to all enemies, and you need to hide. The enemy to least panic about of the 3 is the Swimmers, they usually appear in a water environment. The level almost resembles the real world.