I have no clue why this is happening but, when I went into Faerina's Shrine to do a quest I was unable to participate in battles. The screen would say that I had encountered a foe, so would the battle log, but after i pressed battle the screen would skip the battle and give me the option to explore again. It doesn't skip the random chest encounters so why is it skipping battles? Is there something I need to do to fix it?

I have had this problem too, in every single area/dungeon in both Esior's Fields and Umbra Forest. I can open crates and chests, but no battles. It's like the "enter battle" has become "skip battle".
In Astryl's Vale, it is impossible to engage in battles with enemies that are always there by default, and as far as I can tell, enemies don't spawn anywhere else. Also, interracting with sellers gives you a message that "You are no longer in this zone".

Finally, when I tried to enter Ethernia to try the arena, I get the message that "You are exploring out of this world" and warning codes appears over the image.

Oy, Krin, come and save us!

This was most likely due to this morning's issue.

Are you still having issues?

No, it seems like the problem has been solved.