To clarify: The question isn't about the location being revealed, it's about the text on Dormitories ("You cannot move into the Dormitories"). In that case, "you" prevents investigators from entering Dormitories, but it has no effect on enemies.

The UI over there is pretty terrible. It looks and feels like something from the early 00s.

So, Mateo + Favor of the Sun + Ancient Covenant + Nepthys means he gets promoted from priest to God.

The real reason you don't want this in TFA is that almost all locations in that campaign enter play already revealed, via exploration, so there are virtually no legal targets for it. I don't see why not. The rules prevent you from initiating a skill test inside of another skill test, but I'm not aware of anything that prevents initiating an action inside another action. If you commit Quick Thinking to someone else's Arcane Barrier test, and they succeed by 2, I'm pretty sure you still get your action even though their Move action hasn't fully resolved yet; the same logic would let Ursula trigger her ability at any point along her move.

What it does is effectively balance out the number of bless and curse tokens in the bag. So, if there are six bless tokens and two curse tokens in the bag, you're far more likely to trigger Paradoxical Covenant with the Penny than without it (and, obviously, if you've got ten bless tokens and zero curse tokens, you can only trigger the Covenant with the Penny). Unfortunately, I don't see a lot of ways to get Lucky Penny, Paradoxical Covenant, and heavy blursing all on the same character outside of a Sefina build with Double Double. I'd originally though it'd be cool with Mateo, but it turns out that Lucky Penny isn't Blessed despite its bless synergy. The more practical application is to just take it with False Covenant. At that point, if you draw two curses in one round, there's a 75% chance you'll burn both of them with no ill effects. At that point, you can curse with reckless abandon, so long as nobody's adding bless tokens behind your back.

The Flooded Caverns set consists entirely of locations.

You ignore weaknesses during setup. If you draw one as part of your opening hand (even a mulligan), you simply put it aside and draw a new card to replace it.

This is only partially true. Locked Door can be attached to locations with no clues, so long as there are no clues on locations in play. Locked Door can also be attached to unrevealed locations, but unrevealed locations generally have no clues on them until they are revealed, so there's rarely any reason to do so. That said, it is possible to end up in a situation where the only revealed location already has another copy of Locked Door attached, forcing you to choose an unrevealed one. It's also possible (albeit rare) for unrevealed locations to have clues on them. You could, for example, use Vantage Point to move the only remaining clue in play to a new unrevealed location, then draw Locked Door and end up forced to attach the card to an unrevealed location. It's tough to imagine that being a good play (you're usually better off playing Vantage Point when a location is revealed; the "enters play" clause is mainly to catch the times when a location is already revealed when it enters play), but it's something to bear in mind. (To preemptively clarify something else that often confuses new players: If a location with clues already on it is revealed, you still resolve its clue value in full. So, if an unrevealed location has 1 clue on it, and you flip it to reveal a clue value of 2, you add 2 additional clues to the location, for a total of 3 clues.)

It's worth noting that the word "may" always indicates an optional effect. It pops up on quite a few cards.

That said, you can use Diana or Mateo to stick it on Dayana. Technically Marie, too, but she doesn't have as many options for blessing the bag in the first place (nor can she take the Guardian Covenant to keep the tokens in the bag).

It wouldn't fit in Guardian or Survivor because they don't do curses, and it wouldn't fit in Seeker or Mystic because they tend to avoid physical conflict.

Rookquiescat in pace. We all knew it was coming. But in other news, how about those mutation buffs? I actually really like new Winchester, since the non-taboo version is not only hot garbage but also weirdly out-of-theme for Guardians (since Guardians are usually reliable). Giving it bless synergy brings it in line with the new Guardian cards in Innsmouth, and its potential with Sure Gamble and Jim is icing on the cake. Granted, I suspect it's still not great, but at least it's interesting now. As for Scroll of Secrets... it's basically a really slow Preposterous Sketches that takes up a hand slot. The level 0 version might be good if you have secret generation, and targeting the encounter deck might be strong at low player counts. The real beneficiary is the level 3 Mystic version, which can now properly exploit its scrying synergy (and is much better with Alyssa Graham).

N'Kai was first mentioned in The Mound, published in 1930, so it probably predates Babylon 5.