Basically, something must end here. Because the All Is Lost is where the old world/character/way of thinking finally dies so a new world/character/way of thinking can be born. I like to think of the All Is Lost as yet another Catalyst. It’s an action beat that serves a very similar function to the Catalyst beat in Act 1. If the first Catalyst pushed your hero into the Debate and then into the Break Into 2, then the All Is Lost will push your hero into the Dark Night of the Soul and finally into the Break Into 3.
