Leonel's immediate challenge to the Khafra Dream Pavilion was received about as well as you might expect.
While the Dream Pavilion Challenge Sequences weren't accessible to the world, they were still projected to all Dream Pavilions and could be watched by all Dream Force masters who were part of this network of organizations.
As such, while the whole of Existence didn't experience his first loss, a large segment of them certainly had. It also didn't help that the Ma'at Bubble wanted to use this point to bolster their claim to their Bubble, so they made great strides to ensure that as many of their people were aware of it, even projecting the images to the Bubble as a whole.
