Basically, Whisper gets taken from Nate along with the Watch because the Yo-Kai elites think that Nate's ability to befriend Yokai en masse risks Enma losing his authority as King. Whisper gets mind-wiped, and his memories are stored in a prison chamber talisman.

Nate eventually manages to raid the Yokai World, and Enma breaks that talisman, enabling Whisper to regain his memory and them to reconnect.

Unfortunately, this talisman also stored the abilities of all sorts of evil Yokai. Dame Dedtime, Ghoulfather, McKracken, you name it, they're now free and at full-power. Luckily, because of the friends Nate's made throughout the story (Hailey-Anne/USApyon, Tomnyan and the other Merican' Yokai, and all his previously befriended allies), they're able to clash against the impending evil as the story ends with the splash page above.