This moment is very sentimental and bittersweet.
We're purifying the land and defiling her in the process.
Yoshiro simply smiles as the defilement spreads, crippling her even further.
After you play this level with the Cherry Tree, you're rewarded with Soh Under the Moonlight.
I always speculate what changed this cycle was Soh's compassion for Yoshiro.
What oath is she taking here? What is she swearing to herself?
Why is this scroll part of this story? It must be a meaningful moment.
I replayed the game on NG to see which scrolls are rewarded when.
One more thing I'll add here.
When the villagers become cocooned, they've been spirited away, taken into the lands of the spirits or gods.
So during levels, we are in the lands of the spirits and gods but cannot be perceived by the villagers. Only by Yoshiro. We can be felt by them, certainly. I have a few videos running circles around them and spooking them.
When we return to base, I believe we return to the normal world. Soh's presence can no longer be felt by villagers at all. Yoshiro can still sense us but we're not as 'corporeal' as we were before.
At times, Yoshiro seems to not be able to see us but she can hear us. In the tent, she'll listen to Soh but not look at her, seeming to not be able to. Other times, she looks directly at us.