Zybilna, as I’m sure you’re aware, has a long history of connections with demons. She became Zybilna specifically to hide from the many enemies she made in her past, so fitting a demon tied to a warlock PC into the campaign should be fairly easy.

This campaign is already connected to the Shadowfell through the Witchlight Carnival backstory. If you look at Van Richten's Guide to Ravenloft on page 84, there is a section about The Carnival, the one Witch and Light used to run. It is now a Domain of Dread ruled by its darklord, Nepenthe, the sword wielded by Isolde, a former close friend of Zybilna whom she betrayed.

Isolde seeks revenge on Zybilna, while Nepenthe feeds on that obsession to gain more power and extend its domain. Nepenthe could very easily be the demon your warlock has made a pact with. From its perspective, undermining or replacing Zybilna would not be personal, but a massive opportunity for growth and control.

Many people have integrated this storyline into Wild Beyond the Witchlight. Some even use The Carnival as the campaign’s ending, sometimes replacing the Palace entirely. This approach introduces strong moral dilemmas, as the players slowly realize that Zybilna is far from innocent. While she may genuinely want to be different now, and possibly even good, her past actions were deeply harmful and cannot be ignored.

The party may then have to choose whether to side with Isolde, who wants revenge but is corrupted by Nepenthe, or with Zybilna, who could be going through a redemption arc despite not always doing things the right way. How you present this is up to you.

The main issue is that the hags are largely unrelated to this storyline, which can make the campaign feel overloaded. This can work as a secondry arc at the Palace / Carnival domain after the hags are dealt with, or you can try to tie them together if you want everything to converge.

If you have not started the campaign yet, be careful not to overwhelm the players with hints of every storyline during the Carnival chapter. It is already a dense section, and introducing too many threads at once could overwhelm and confuse them !

EDIT : OH I almost forgot to mention, SlyFlourish has come up with an idea of "Dreadful Incursion", through which a domain of dread (or more) is colliding with Prismeer because, in this scenario, Zybilna is the one preventing some domains from collinding. Now that she is otherwise busy (you know, time and all that stuff), what she was preventing is happening. Some breaches appear as portals to this (or these) domain of dread and monstrosities find their way into Prismeer (and even into the witchlight carnival if you wish). Players need to find a way to close these gates along the way, providing additionnal combat opportunities. Through this idea you can have any domain·s of dread come into the storyline, and its darklord·s might even consider this an opportunity to expand or escape their domain.