A/N:
1: this is based on the game RWBY: Grimm Eclipse.
2: as far as this story is concerned, the first mission of RWBY: Grimm Eclipse was in Forever Fall.
3: I do not own RWBY: Grimm Eclipse. Or RWBY. Or Summoner's war, in case someone decides that its presence in the overall timeline is grounds for suing me.
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In the testing grounds for Merlot's experiments…
Team RWBY finishes cleaning up the Grimm and androids in Merlot's test chamber.
"NO! And so, it has come to this…"
An object drops from the ceiling, creating a cloud of dust when it lands. As the dust clears, they see a giant suit of armor. As it stands, their gaze follows it up… and up… and up…
Yang, slack-jawed, comments "Damn, that's a big Grimm."
Ruby would call her out on her cursing, but it was well earned. The armor is at least 30 feet tall, casually holding a sword just as long in one hand, and a very large heater shield strapped to its other arm. The armor has the green glow of the mutants coming from the gaps between the armor plates, and the sword and shield are made out of the green crystal that seems to sprout from the mutants.
The armor stares at them for a few moments before gazing at one of the screens showing Merlot's face. A deep, calm voice rumbles out from it. "These ones yet live. It is not my place to change that."
Merlot looks taken aback, then smiles. "That really was the perfect batch of serum, wasn't it? Congratulations, you have passed this final test. Now go do what you were made to do." A large door behind the armor slides open, revealing the coastline.
The armor nods to merlot, then gives a light bow to team RWBY. "I apologize for the inconvenience you've all gone through. I'll be off." It then proceeds to walk out the bay doors and straight into the water.
They all stare after it. Yang manages to get out, "Well… that was a thing."
Ozpin's voice comes through the call. "That was rather unexpected, Merlot. I guess I could bring myself to support your continued research if you can replicate that result."
Merlot just gets a sad smile. "All of my research and samples are gone, destroyed by your students. I would be angered, but looking back on it all I realize I played the part of the mad scientist perfectly. They were only doing what seemed right based on what they knew. Now, It's all over. I have nothing left." He pauses for a moment, looking thoughtful. "Although… there is still one thing I can do…"
Red lights start flashing throughout the chamber they were fighting in. Ozpin's voice comes through their scrolls, "Team! Merlot is going to blow up the whole lab! You've got to escape!"
Ruby calls out "Let's get out of here! This way!" as a door opens on the wall hear them.
"The airship should arrive any moment. I'll see you as soon as you arrive back at Beacon."
The team piles onto the Bullhead that hovers over to the platform they had just stepped onto. The door closes as it turns and pulls away, rocketing away from the island.
Merlot's voice comes over their scrolls, "Nobody else will ever be able to harvest mutagen from this island. Goodbye, Oz, old chum."
With those last words, a full half of the island – the half that the mutagen showed up on – is annihilated in a massive explosion.
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A few days later, team RWBY gets back from a mission only to stop and stare at something a short distance from the Beacon landing pads. Weiss mumbles, "That wasn't there when we left."
Three nods of assent, Yang commenting "Nope."
Weiss sighs. "That's it, my insanity quota for the day has been thoroughly exceeded" before wandering off in the general direction of the dorms.
The armor from Merlot's island is standing near the Beacon landing pads, so still they would have assumed the school had simply gotten another decorative statue if it weren't for how familiar it was.
Blake addresses it, "so the 'what you were made to do' Merlot mentioned… that was protecting Beacon?"
The armor's voice rumbles out, "Yes."
Yang nervously chuckles and rubs the back of her head. "Now I feel even worse for breaking Merlot's stuff…"
Ruby is gazing intently at the armor. "So… you're friendly now?"
There's a few moments of silence, during which the remaining three members begin to tense. "…I am on your side, but I'm afraid I will never be your friends. No matter how good your intentions were, your actions resulted in the death of my creator and ensured that I would never have brethren."
They shift uncomfortably before making their way towards the dorms themselves.
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This idea came to me while I was listening to Lusus Naturae, the theme song to RWBY: Grimm Eclipse. It got me thinking, "What if Merlot wasn't obsessed with creating a powerful Grimm, but was instead obsessed with creating an intelligent Grimm, which could be convinced to work with mankind?"
I played through the game again, and at least 90% of his statements pre-Deathstalker could apply to a version where his serum is designed to make the Grimm sentient.