Liu was actually successfully killed by Jeff, but was brought back to life by the Nurse Ann. At first, they lived in an apartment together for a while, but then when he was reunited with Jeff and was introduced to the Under Realm, Ann moved into the House with Slender and the others while Liu stayed in the Over Realm.
He's not exactly part of Slender's alliance, but he doesn't support Zalgo in any way, shape or form. He considers himself neutral when it comes to the whole thing.
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Creepypasta Headcanons
RandomY'all please stop commenting stuff like "Sorry but this isn't canon" I WROTE THIS BOOK WHEN I WAS IN MIDDLE SCHOOL, THIS IS WHY I SAID THE FOLLOWING INFORMATION: These headcanons are all so bad, I made this a while ago and they've changed a lot so...