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The era of the Yindun Avatar exists as a calendrical convention, by those who believe that the Yangwu Avatar died in the Air Nomad Genocide of 0 AG, before being revealed to the world. In their view, this is the era of the "occultation" of the Avatar, that is, the Avatar being hidden from the world or in seclusion. Some people seeing the era name without knowing the context have become confused and supposed that the Yindun Avatar is an actual person, whose native element is Water. However, that was not the original intent of assigning an era name to the occultation of the Avatar.
Many centuries ago, the Zhiyuan Avatar (1270-1181 BG) went into a "minor occulatation", secluding herself from the world and stepping down from her Avatar duties after accidentally killing the King of Omashu, and subsequently failing to prevent a war between the rival Earth dynasties of Ba Sing Se and Omashu. However, at that time, people simply continued to use the Zhiyuan era name rather than making an "occultation" era name, probably because it was widely known that the Avatar was "retired" and not actually deceased.
Worldbuilding Note
Unlike the other Avatar names from this era, which come from Wan Shi Tong's circular calendar seen in The Library, this one had to be named by me because it is a calendar placeholder and not an actual person. (Also, Wan Shi Tong, being a notably well-informed and powerful spirit, is presumably aware that in Canon at least, Aang is still the incumbent Avatar - or else he has just decided to extend the Yangwu era indefinitely as his timekeeping convention.) The era name I chose is the Chinese translation of the Islamic theological term usually rendered in English as occultation.