While I agree with you regarding the low 1-C and possibly 1-B (Just like more or less everyone knowledgeable about the verse already did) I do have some reservations regarding the translation that should be used for the justification itself.
For example, you used the panel about Yan Sen saying "this world" during the tea conversation, however, using Mangatoon translation (which is objectively better than the other one that I'm sure is MTLed) we get
this which is completely different.
There is the same problem with Henry's "I am the setting" quote since in the Mangatoon translation there is no mention of setting, but more so of character design. While it's different, I think it fits better the narrative of the story itself. It's
Henry's character design that makes him that powerful in the first place. That goes also in tandem with Yan Sen creating another Henry from his blood, which isn't about changing/creating a new setting
but replicating the character design of Henry.
There is also the nature of the white void itself that need to be addressed. I think it being included inside Henry's universe/setting or however you call it seems reasonable enough (the simple fact they fought in another world for a chapter or two and that this world was a universe on its own is enough proof to say that the white void > any universe within Henry's setting), also, here's the Mangatoon translation that describes the white void as an
uncharted space, while this is a word I'm not familiar enough with, I think it means a space that isn't outside of something but just unexplored or never visited, cementing the fact it's inside Henry's setting.
I've said it in another message, but Henry himself acknowledges that Yan Sen is beyond/outside the settings, don't know if that can add anything relevant but eh.
