This is an interesting theory.
IF this is true, August could definitely still be connected.
Maybe this is how it happened:
Gepetto wanted to save his son, Pinocchio, from the curse, but only one person could go through the wardrobe, and that person was Emma. So, Pinn was somehow changed into the storybook. then, the 7-year-old boy who found Emma (I’m going to say this was August) found the book with her. He kept the book, and had previously been to SB, before we saw him a few weeks ago. This must have happened a few years ago in the show. He found a way to get the book to MM, knowing she’d give it to Henry, thus beginning the mission of helping Emma believe.
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