Done. All is well. I'm ready to post.

As Craig basically was exempt from society for a good while, I'm going to say that Norman was in town and awarded the badge for heroism during the attack (Gym Leaders have been shown to award badges on such acts, IE Eirika in response to Ash saving her Gloom from a fire). Craig would quite sincerely have been unable to go anywhere near a settlement that he didn't want flash-frozen in diamond with his insane Yandere girlfriend around, so this is really the only way that could make sense.

One other thing of note: Kat, the girl rescued by Craig in the last bits of Sapphire, is currently in the custody of Detective Lee, and nobody knows what exactly is up with her for now, though obviously the Weather institute is clearly related due to the recordings. She'll crop up later, but not for a good while.