Yeah, that is what it seems like. I wonder if the dead characters will haunt the main characters as in appear and disappear. I keep thinking that Hook is there, but not quite there. What are the details of him filming? Are those scenes being hidden or is he shown interacting with the other characters? Maybe it won’t be like that though because we see characters walking around, waiting in line, helping kids cross the road, running Gold’s shop, being the mayor, sort of mundane things.
Though it may just be like with Emma keeping away from everyone in 5A. Hook doesn’t want Emma to help him, so he is staying away. If Milah is forced to be a crossing guard then Hook should have something like that happening to him as well for all of his evil which was much greater then Milah’s. There is the suggestion though that this is just the main characters perspective of the Underworld, which is problematic writing, but this is Ouat.