This isn't a bug... but Jeth outright throws a curveball that the Mother's daughter is dead and you can ENTIRELY skip over the dialog where he says he is a childhood friend making the next part even more odd.
Yet in either case in a "He said, She said" situation where she MIGHT have a good reason to believe what she believes... I'd kind of would ask how he knows what he knows. Did he SEE it? Did he hear of it?
This is especially important since you cannot do the, naturally logical thing, and ask other people about this... (I assume we are just supposed to 100% fully believe Jeth at his word.. even if we don't speak to him we somehow know)
This quest is just REALLY weird and oddly difficult to solve.
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Here is a solution I tried to do for your humor
You know how there is a child at the beach?
I tried to convince him to pretend to be that mother's child and just give him/her the doll.
Edit: Maybe if I find a wig... I can dress him up as Erma. I mean its a win win! He got no parents and she gots no kids.
