The Lost Refuge was one of the first retreats of humanity as The Void encroached upon Eterra. During the campaign you encounter this area long after it has fallen to the void, however it has a backstory of one being an underground city under siege by the void, and banding together for a final stand. You can read a journal during the quest that outlines some of the final days of the Lost Refuge. At the quest turn-in, you have the option to lie, and state that it was the last refugees wishes for their refuge to be called “Rat City”. So its inclusion is not referring to its current state as a void overrun area, but its history as one of the last bastions of humanity.
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