..... what an Awesome post from Nomad that was a Great and Thought Provoking Reading Experience!
Answers to your questions:
1. No! "The Trap" has been sprung and there is no returning to your original positions for Wave Three!
2. Basically the Oath Bow responds to the oath spoken in slaying any enemy that you may encounter.
If you were in the forest and a band of HobGoblins attacked you [or Kobalds, or Ants, or Lizard Folk or whatever else] and you uttered the oath then you would have the extra fire power until either the enemy was dead [in which case you would have to wait 24 hours before you could use it against another enemy!
or
If some of the attackers escaped then your Oath Bow would have to wait one week before it could be used against any other type of opponents, unless you were able to track down the escaped attackers and eliminate them [like if it took 3 days to find them and you finally killed them all then you would have to wait 24 hours before you could swear another oath against another enemy!
But if you finally caught up to them, say 10 days later, the Oath Bow enhancement would have worn off before then.
Chances are quite likely that you will encounter HobGoblins in your future journey once you escape the Dark Arena!
However, there are No More HobGoblins to fight in the Dark Arena, but you may wish there were more compared to what is on the battle schedule between where you are now and the freedom you are seeking!