I have read that you can only battle the ONI on the palace once. However I have been witness to the fact that if you activate the obelisk behind the Jade Champion, the level resets, or starts over.
However, I myself am unable to activate the obelisk. I am level 45, and have completed all quests. What am I lacking, and can I go back and fix it?
if you did the quest to fight jade oni and heal the emporer, you should be able to go outside and back in, then the obelisk will summon jade oni as many times as you want. at least this is how it worked for me.
