This Nightmarionne design represents Henry's guilt over the events of the story, specifically Charlotte's death. Her main accent is blue, representing Henry's sadness and self-loathing as he blames himself for Charlie's death; That's why this design is essentially just a shadow version of Charlie. Her right hand, the one with the wristband, is the monstrous one; a constant reminder of the failure of Henry's security puppet. Her deal is essentially that Henry can't let go of what happened, and he lets Nightmarionne consume his entire life, explaining why he is essentially MIA for like 40 years; he doesn't believe he can do any good after what he sees as his mistake or something like that. I imagine she serves a very similar role to Nightmare, with some key differences (Nightmarionne is Henry obsessing over what he did while Nightmare is Michael failing to accept what he did). She is also goopy like RXQ because I guess that's just how the shadows look in my version of the story.