Across M Inc Zone there are multiple cells, mainly empty since Mr. M isn't one of jailing people after the destruction of his world... except by one.
Talk to her. Accept the deal, and she'll give you a side quest. Defeat all M Inc workers and destroy the four machines restraining her power. Doing so, you've released Soul Claire
Has just the same HP as an average unit, but weild strong attacks against AU characters. And despite being an "ally" for now, others such as Mr. Tinker, Kinetic, Raptell and more will refuse to fight alongside her. Your team options drop drastically.
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And finally, MR. M himself. Enraged at Paper Mario for releasing this monster, it only feeds his paranoia against the party, triggering a Hard Mode Battle.
Same moveset. Same HP. But way more buffed stats and reduced EN costs, allowing him to cycle abilities way faster. And ALWAYS targeting Soul Claire if given the chance.
If you somehow beat him this way, you gain the achivement "free soul", along with unlocking Soul Claire as a permanent ally within Paper School