I was playing with 2 out of 5 locations still open. With characters present at both.
I encountered the villain at one of the locations, got the option to temporary close the other location, which was successful.
I then successfully defeated the villain.
I would have expected the game to end at that point (villain defeated, no other locations open at that moment).
Instead I got the shuffle and hide-the-villiain animation, with cards being seen to drop on both locations, followed by the sequence that shows that the location where I encountered the villain is being closed and the remaining cards for that location removed.
Shortly after I lost the game as there was only one card remaining in my blessings deck, so I don't know of the villain really was shuffled into the one location that I had temporary closed, or if, as the animation showed before, there really was a 50% chance that the villain was put back into the location where I encountered him and then thrown out when that location closed.