Michael and the Dragonborns teleported just a few kilometers away from the Mining Shaft. Behind him were the Shadow Orcs, who were just here as a guard to make sure nothing wrong happened.
Of course, Zion wasn't allowed to go anywhere near this mission. He felt sorry for the youngest Dragonborn, but having a full Dragon emerge out of nowhere would definitely send the wrong message amongst the inhabitants of the Mining Estate. They'd think they were invading or something.
Now, the reason why they didn't teleport directly inside was because he wanted to see the situation in the estate with his own two eyes.
He wanted to experience what they were feeling. Fear what they were fearing. He wanted to live as they did, at least for a little bit. Only by knowing them intimately could he convincibly try and empathize with their worries.
So, using his magic, he was able to wrap everyone's faces with a disguise that made them look a lot less… impressive.
