Theories About Kingdom Hearts’ Master of Masters
He Possessed Luxu and Became Xehanort and Eraqus’ Master
Possession has been a major thing in Kingdom Hearts, and Xehanort possessing individuals has been the main crux of the Dark Seeker saga. This one also says that the Master used possession, instead this time he actually possessed his sixth apprentice Luxu.
Considering the Master seemingly deceived his other apprentices, the Foretellers, it’s not unrealistic to think he wasn’t telling the exact truth to Luxu either. In fact, Luxu may have been far more powerful than the Foretellers, and the only vessel qualified enough for the Master to inhabit.
We’ve seen possession multiple times in the series with Ansem possessing Riku, and especially with Xehanort possessing Terra to become “Terranort.” This could be the reason Luxu is sent away, and the reason he wears the exact same coat as the Master.
Another, very likely, theory out there says that Luxu became the master to Eraqus and Xehanort. For one, in an early Kingdom Hearts 3 trailer, we can see the two playing chess in a room that has the No Name Keyblade prominently displayed. In that scene, Eraqus says that the Ancient Keyblade War is “The Master’s favorite story.”
Luxu, possessed by the Master, could have forced Eraqus and Xehanort into their opposing light and darkness role, and he also could have taught Xehanort how to possess someone.
Of course, it’s also possible that the Master and Luxu are simply working together. The Master gave Luxu his task, and in order to fulfill that task he takes on Eraqus and Xehanort. Meanwhile, the Master sends his heart to slumber within Luxu’s, similarly to how Ventus’ heart slumbers within Sora, just waiting for the right time to awaken.
You can see more discussion and theorizing about this particular theory here.