the southern part wont be active till campaign 3, which i think is in a couple weeks, it unlocks that area and adds stuff to it, also making it easier to get there.
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its not the entire city, he tore a chunk off the city, pulling the vault away from the city, so this is the outskirts of the city.
think of it like grabbing a bank off the edge of the city, then calling the bank "the entire city" no he just pulled the bank off, the rest of the city was left behind.