I'm so excited for this one. Storywise I think, that this game will be the bridge between the
OS-Series and the
Dragon Knight - Saga, because it will reintroduce Damian and his story for newer players.
Lucian doesn't need to die in
Fallen Heroes. If I remember the timeline correctly, the war between him and Damian took a while, so it can be just a little inbetween war on a global scale, with Damian reminding the Black Ring who's boss. Because, let's be honest, in Rivellon every week is "Almost-Apocalpyse-time"

.
I also think, that the
Dragon Knights only participated very late in the war and since the
Divinity-timeline and lore is very vagued, they don't need to bend it too much for this game (or part 3).