Here is the Bent Bough Forest. The scripted interaction begins seeing an altar. Investigating the ground around the altar, along with a Survival check of 17, leads to the discovery of the Waterlogged Journal. The scripted interaction ends at this point. You won't be able to do anything more with this area for now.
The Journal itself mentions a word that is suggestive of "Arkemyr", and also mentions the "Sanguine Harvest".
Go see Arkemyr in his Manor again if you want to make sense of it. He'll mention that a book he keeps makes reference to it. Go to Arkemyr's Bedroom. The bookcase at #3 has a book titled, "The Cult of the Sanguine Harvest", which indicates a sacrifice that takes place on the 16th day of each month.
Enter the forest again on the 16th day of any month. You'll now witness a ritual sacrifice as described in the book.
You can wait for the Cultists to sacrifice their victim. They will then head straight for you. Either hiding from them and letting them pass by, or sneaking away, requires every party member to make a Stealth check of at least 18. If you succeed, you end your encounter at the Forest without any further consequence.
You'll have to fight them if you fail the check, or if you attack them after they complete the sacrifice. If you kill them after they complete the sacrifice, one of them will leave behind the Sanguine Great Sword.
You can attack the Cultists prior to completing the sacrifice. If their intended victim, Winking Audr, survives the battle then you have a couple of options. One is the Benevolent option that gives her 100cp and sends her on her way. The other is to have her join your ship crew.
There are also supposed to be options to use a Wizard's Arkemyr's Dazzling Lights and the Priest's Dazzling Lights to scare the Fampyrs away from participating in the fight. But I wasn't able to click on them, even when I had party members with those abilities. Could be a bug.
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Enter the forest again on the 16th day of any month. You'll now witness a ritual sacrifice as described in the book.
