After starting the Immortal War, Kai Syaoran disappeared. Some believed he had been killed by the Grand Water Immortal, but the Myriad Sword sect was too preoccupied with the war to look for him and confirm his life or death.
The sect didn't need him to fight their war; he was too weak, and his power was insignificant compared to the broader conflict. Eden City, on the other hand, needed Kai Syaoran. He was the Eden Immortal, the supreme ruler of the city. Before his disappearance, he had set things up so the city would continue to run without any issues, even in his absence. He had established a government and various branches to ensure nothing would go wrong for at least a few thousand years.