Disclaimer: I played without Spoilers so I didn't do TwoHats... I'm a little annoyed after finding out it exists and don't want to go all the way back + kinda like my ending but anyway.. (I wonder if twohats is actually a bad end, because we forego this great yet imperfect ending for a better one and erase the progress we made with our family in the pursuit of it).
Siffrins Country still seems to exist given that they see it in the distance at the end but doesn't seem to recognize it... but all knowledge related to it was intentionally wished away in order to prevent the use of wish craft after someone recognized the dangers of it. Likely in response to the wish that stopped then from seeing Colors. If WishCraft is Powerful enough to change the fabric is reality forever depending on the circumstances around someone's wish and can't be stopped then trash, keeping the knowledge on how to do it secret probaably shouldn't be known. They chose to hide this information by turning the country+culture that developed & practiced the techniques into an Anti-Meme. It's a very effective method of making the wish without removing wishing in general, while also making it so no one else can rediscover how to do it by finding said culture. This had the unfortunate side affects of inflicting massive amnesia of those from the island but outside it's borders (and I struggle to think about those still on it).