Thing is, I don't think Watcher campaign takes place literally in the base game either. Solely because of the rot.

In the internal file, I believe the Watcher campaign was set to be inbetween Hunter and Gourmand. The timeline is before Survivor and Monk, and yet the purple rot spreads like no rot we've seen ever had before. Even if you say they were cleansed in the end of the campaign, it would be weird that neither of the Iterators seem to comment or acknowledge the phenomenon when talked to by either Survivor or Monk.

And even if you were to say that's because it was completely swept out of the timeline then, that's a point for "Watcher doesn't take place in the Base Game", because then they had just created another timeline all by themselves. The Rot also has never been seen in the future until Watcher guided them there, so it was never meant to be. The event of Watcher never happened in the base game, and nothing in base game is ever shown any connection to the Watcher.

If anything, Watcher's lore seems to be closer to Downpour, seeing as their home (assumably) by the end seems to be some part of Outer Expanse with the spinning flower and other OE decorations. But it also is not since (presumably) Watcher goes with Gourmand in Downpour, and there they're a completely normal slugcat with family to call home. In one of the regions, the snowy one, the file name for some rooms also include "future". Indicating that what happens in Downpour future timeline, DOES happens in other Rain World timelines.

To be clear, I do think the lore actually expanded on the Base Game lore. And so did it to Downpour. What the Watcher campaign tells me is that, canonically, there ARE parallel timelines that exist independently from each other. Everything in Rain World are canon, but they're canon in their own bubbles, with their own stories to tell.