ok, Big D, i see, but what happened to him AFTER you kill him. if you go back later, there are two shumis there talking about NORG hatching from whatever that was he left behind (an Egg of some sort?) i think that is what kikyo meant.
That 'egg' was the wreckage of NORG's pod, the armed and armoured vessel he's in when you fight him. The other Shumi don't actually mention him 'hatching' , rather they simply describe the Shumi 'evolution process' which made NORG into what he was.
Now, I realise that NORG's body is no longer there... but then, Final Fantasy enemies have a way of disintegrating upon death. Either that, or the Garden Faculty had to clean up the mess. Maybe that's the real reason they all left?

"Hey! We're Faculty, not lowly janitors! Disposing of expired Jabba-lookalikes is beneath us! WE QUIT!"