spoilers!!
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Your theory is very very close! Basically we're currently in the third timeline, and our gorgeous MC CEJ has been taken back to the first timeline!
The timelines occurred when something bad happened in timeline 1, so CEJ of timeline made a watch and reversed time, creating timeline 2. Something bad also happened in timeline 2, so LSY found the watch and reversed time, creating our current timeline, timeline 3.
iirc, his memories of the other timelines are jumbled due to the time reversal, so he doesn't remember what happened in the first 2 timelines~

I’m going to guess that was his original world or another alternate world. Since I always felt there was a disparity between his past and present. Maybe him and his other self got switched so they are in each others reality?
I remember reading something in the comments about him being in a different reality when he showed up but idk if I’m imagining that
Things can also get lost in translations so… I could very well be imagining all this just bc I daydream too much