TheOcelot

So Generations happened after S3&K in the classic timeline?

It seems like it. So we have:

Sonic 1 > Sonic CD (?) > Sonic 2 > Sonic 3&K > Sonic Generations > Sonic Mania > Sonic Forces

As far as CW's reasoning, I guess this affirms that the Phantom Ruby is a bit of a plothole scapegoat if something doesn't make immediate sense. Why is "X" like this, why are they suddenly here? Phantom Ruby doin' weird things.

I'm certain this was explained before back around Mania's release, but here is a bit more in depth. It also does suggest that despite looking different from the rubies in Forces, this one is not native to the Classic dimension. Which now brings up the question on how it got there, which again could be handwaved by it being a tear in the space-time continuum thing. 

Biggest takeaway here for me is confirmation of canon that Generations caused a split-timeline with Mania being the new future that happened for Classic instead of Sonic 4, which makes me happy coz that's been my headcanon all along lol.

So basically....

       Sonic Generations 
                     |
      ‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾
     |                                      |
Sonic Mania                  Sonic 4
     |                                      |
Sonic Forces            Sonic Adventure

*deep sigh* cool

Also considering the final state of Little Planet after 4 and Mania:

...it's all the more fitting that the Modern world is made the Bad Future and the Classic is the Good.  ( ͡° ͜ʖ ͡°) 

What people forget is that Angel Island was grounded BEFORE the Master Emerald was taken in Sonic 3. The Japanese manual made quite clear that the force of the Death Egg landing on it sent the island down onto the surface of the ocean, this is what leads to Sonic and Tails exploring this new island that had appeared.

The Master Emerald DOES keep the island afloat but other forces of nature can overpower its energy and force Angel Island down. It needed both it and to be rid of Death Egg's weight to be airborne again.

The bigger question for me is where exactly is Sky Sanctuary located since it is airborne and separate from Angel Island in both cases it loses altitude.

@Indigo Rush

Sort of.  Sonic Forces isn't really part of the "new classic" timeline, rather Classic Sonic crosses over into the Modern timeline again.

So it's more like:
 

ORIGINAL DIMENSION          OTHER DIMENSION
Sonic 1 -> S3&K                           Sonic 1 -> S3&K
          |                                                       |
Sonic 4                                        *Time Eater sends
          |                                             Sonic to Original
SA1 -> Colours                                 Dimension*
         |                                              /
Sonic Generations (Takes place in Original Dimension)
         |                                              \
   Lost World                                    Sonic Mania
          |                                             /
Sonic Forces (Takes place in Original Dimension)
          |                 |                            \                           \
IDW Comics    TSR                 Encore Mode       Sonic Mania Adventures
 

Yeah we got that nice bit of spin-off media at the end just to confuse things further - spin-off media that takes all the games before them as canon but is not actually canon to the games lol.

The key point is that in the original timeline, Sonic, Tails and Eggman were NOT whisked away by the Time Eater after S3&K, Eggman did not learn anything from his future self, and Sonic 4 was his next scheme after S3&K (well, and 3D/Chaotix/R).
In the other dimension, they ARE whisked away and Eggman learns from his future self, and during his change of plans, discovers the Phantom Ruby.

The only thorny parts of this theory are hypothetical questions like "does the phantom ruby remain dormant in the original dimension somewhere?" and/or "Did events long before the franchise's beginning, such as the Space Colony ARK incident, still happen in the other dimension if everything else is exactly the same until the Generations whisk-away?"

Fortunately these questions have a couple of potential definitive answers:

@JezMM I’d leave IDW out of it, personally. We’ve been getting implications that it’s past history is not 1:1 with the games.

Oh really?  I hadn't noticed but fair enough.  Tbh I only really included them for a laugh anyway after realising that it was technically the same situation as the SMA/Encore split lol.