From my interpretation, it seems that Schala teleported the party back to wherever they were before the dimensional vortices appeared and wiped their memory. In other words, they proceeded to defeat Lavos as normal and everything played out the way it did in Eclipse Magus's timeline (or not, if your Magus is dead...then Eclipse Magus would have to be from another dimension). Which means that the knowledge was more for the player's notice than the characters.
