Just to recap on the whole Lavos pulled back Chronopolis.
IT IS TRUE! IT IS ALL STATED IN THE GAME! And I'll try to explain it to the best of my ability Oo
Kk, It's stated that Lavos' back-up plan was to pull back Chronopolis in time. But until the Chronopolis workers activated it, only then could Lavos have done it. The sole purpose of the time crash was to make sure that Lavos could intercept the Frozen Flame by either
1) Get it back to the moment when he exited the first pocket dimension to get the FF fused into him so he can destroy Crono and co.
or
2) Fuse with the Frozen Flame in the time steam... I will explain more now.
At the end of the game, at Opassa Beach, it is stated that only when The Ocean Palace was crumbling to pieces, a time gate had opened up again and started sucking in everything. The Mammon Machine and Schala were sucked in the process.
This time gate was different. For it seems that it did not travel to a certain time, but let you fall through every age till you landed in the Darkness beyond Time.
Basically, to explain what was happened, it's like saying that you're at the top of a building. The building has a vent and you jump into the vent. As you fall, you pass time, and the sides of the vent are clear and you can look in time through it, and if possible, stick your hands into the walls and basically travel into that time.
This is what happened with Schala.
Schala was falling down and down in time, Chronopolis' technicians managed to stop the Frozen Flame before it was fully dragged to 12,000BC or 65,000,000BC. As Lavos himself was falling in time after his defeat, and the attempt failed, he crashed into Schala in the time steam and started to merge with her. Her mind was being overtaken by his evil, she had no choice. She did what had to be done, creating Kid and playing god. Schala stuck her hand out in time and Kid was set forth into the world. But whilst this was happening, she heard Serge's crying echo through the time steam. Lavos and her landed in the DBT but the time steam was still around them. She attempted casting herself into the timesteam, but failed and resulted in the Magentic storm. With those few minutes, Chronopolis malfunctioned and Schala somehow used her powers to get Serge, Wazuki and Miguel unconcious and land them at Chronopolis. By this time, Lavos had intergrated with her, all she could do was call Serge to the flame, and he was healed....
And Schala was encased in that shield as the murger continued.
Basically, the fact is that Schala and Lavos never merged, but Lavos started the merging process. Because Time goes differently in the DBT, to them, it may have been simply 13,000 years worth of time passing in there, but none of it affected them. In all this time, Lavos was only able to merge with the Mammon Machine and the Lunar Dragon. Personally, I think that case that Schala is in was acctually a shield so that Lavos would have a harder time merging with her.
Nether the less, I think Time Error works in this occasion.
I think I went off topic Oo