Rastus has returned and is far more powerful than Deacon can handle. The time for masquerading as a human is over and Ayari takes his true form as the red dragon.
Spoilers: The circumstances that allowed the dragons to escape Despond's world left Ayari and Rastus heavily damaged. While Ayari survived his injuries, Rastus had to take a human host in order to live.
Afterwards Ayari could not fully become human, hence his apparent disfigurement. Now that he's transformed into a dragon, he'll never be able to become human again...