I think it’s based on pure speculation at this point, unless Adam and Eddy directly hinted that Regina turned Kurt into some other form. But how exactly would she have accomplished this with magic? Maybe she gave him a magic mushroom that she got in Wonderland and shrunk Kurt down to fit into a drawer, like Cora shrunk Henry Sr.. But I have doubts about this claim and even my own theory.
Agreed, I think this is supposed to be sensational speculation. I am 95.5% sure Kurt is in the basement. I don’t know if he’s aged or anything, but I think he’s in the basement.
I think either Granny will legit die or Baelfire’s soul will be sent to the same place as Philip’s soul, and everyone will think Neal is dead.
I do think Granny is going to die at the hands of Tamara.