There, she built a device to harvest the remains of Senketsu from the atmosphere- which also contained Nui's life fibre DNA. After the graduation ceremony and Rei's failure to destroy Ryuuko and Satsuki, she took full control of Maiko and slipped away into hiding, discovering the remains of her old lab. She floated back down to Earth and possessed a suitable host body- Maiko Ogure.
Rather she was 'Playing possom' and simply disintegrated into still-living life fibres. It goes something like this: - When Ragyo crushed her heart at the end of the series, she didn't actually die. I had a crazy idea for a KLK season 2 which I actually got from a dream.
