Until proven beyond reasonable doubt, I am going to safely assume molluck is alive. He probably just went unconsious, and later made his escape. Being that Rupture Farms was never "destroyed" it was shut down by abe.
Also, the whole characters overlooked in the Quintology, might prove very big in the larger scope of things, and in the big picture. So molluck who is overlooked as being alive at the end of the first game, could technically return at the end in a very important role. Or to finally extract his revenge upon Abe.
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