The Tea Master is not gone for good. I don’t want to say much more than that yet, because when and why he returns is part of the story rather than something I want to answer outside the game.
The fuzziness there is intentional. You are not supposed to have a complete understanding yet of exactly why the protagonist ended up where they did, or how much of it was accident versus something more deliberate. That will make considerably more sense by the end of Act II.
There is definitely an overarching story to Act II, and it is not intended to just be a prolonged suffer-fest. The current end of content only exposes the first layer of it, which is part of why it can feel flatter right now than Act I did at the same point.
As the Sovereign regions expand, the Tyrants stop being six isolated obstacles and start showing different expressions of the same broader system. The protagonist is learning how power, sovereignty, subjugation and survival actually function in this realm, and what it means to participate in those systems rather than simply observe them from outside.
There is also an emotional progression to the act, but I would rather let that emerge through the regions and characters than summarize where it is going in a comment.
TLDR: yes, there is more going on, yes, the Tea Master still matters, and some of the questions that currently feel deliberately fuzzy are supposed to remain that way for now.