In any fictional work where time travel is involved, it always makes sense from the point of view of the main character. It does not always makes sense from a strictly historical/chronological point of view, though.
In other words, how does Labrynna look from the point of view of all characters who do not travel in time?
Any time in the past and in the future is the Present sooner or later. There is no privileged point of view along the timeline.
For the statement above, "alteration of the past" is the same as "alteration of the present", and the latter is apparently nonsense. Therefore, an "alteration of the past" is just a plot flaw.
Still, "alterations of the present" can be nice and functional for comedies ("Back to the Future", "Sliding Doors"), but nobody considers The Legend of Zelda a comedy.
Let us give priority to what is said and shown in the games; use pure logic, not physics; never fully trust any manual.
Try and avoid retroactive corrections to continuity as much as possible.
NONETHELESS, the game says that the flow of time is disrupted. This means that the forked continuities can mix up randomly.
Along the True timeline, since the Maku Tree senses the Essence of Time during Zelda's age, it has to be assumed that the Essence materializes again after it was collected by Link during Ambi's age. With this logical assumption, the True timeline becomes self-consistent, and the False one becomes unnecessary.
Deku Scrubs settle in the western woods of Labrynna, henceforth called Deku Forest.
At this point, one fact does and does not happen at the same time; continuity splits in two:
Link DOES NOT arrive from the future (FALSE)
.
Link DOES arrive from the future (TRUE)
During Ambi's age:
The Essence of Time stays in the dungeon.
During Ambi's age:
Link collects the Essence of Time from the dungeon.
The Deku Scrubs leave the forest.
The Faeries settle in the western woods, that changes name to Faerie Woods.
The Deku Scrubs leave the forest.
The Faeries settle in the western woods, that changes name to Faerie Woods.
During 400 years, the Essence of Time materializes again in the dungeon (assumption).
During Zelda's age:
The Maku Tree senses an Essence of Time in the western woods.
Link accidentally destroys the entrance to the dungeon.
Link uses a Time Portal to leave this continuity (i.e. he moves up, to the other column of this table).
During Zelda's age:
The Maku Tree senses an Essence of Time in the western woods.
Link accidentally destroys the entrance to the dungeon.
Link uses a Time Portal to travel back in time (i.e. he moves up, to the same column of this table).
Conclusion:
The Essence of Time is in the dungeon.
Link left this continuity for good (COWARD!!!).
Conclusion:
One Essence of Time is in the dungeon.
A copy of the Essence of Time (from the past) was collected by Link (HERO!!!).