The Clone Wars: A Continuity Error
After Star Wars: The Clone Wars, it's impossible to make sense of the origins of the Sith. Star Wars is no stranger to plot holes and continuity errors. Given the amount of content that the franchise has pushed out in the 46 years since the first Star Wars movie (later titled 'A New Hope') first hit theaters, it is guaranteed that retcons and plot holes will pop up here and there. However, The Clone Wars season 6 created a continuity error that has a significant impact on the history of the franchise's main villains - the Sith.
Darth Bane with the Sith Masters.
In The Clone Wars season 6, Grandmaster Yoda travels to the Sith world sometimes called Moraband or Korriban to face trials to prove he's worthy of training to become a Jedi Force Ghost after he dies. He visits Darth Bane's tomb and is confronted by the shadow of Darth Bane. When the shadow asks if Yoda knows who he is, Yoda confirms that he recognizes him as Darth Bane. Darth Bane created the Rule of Two, and he is believed to have been slain by his apprentice, Darth Zannah. Yoda states that he's unafraid, as the shadow is just an illusion; Darth Bane no longer exists. Yoda passed on, with viewers thrilled to discover a few pieces of the puzzle of Star Wars history - but there's no way to put these pieces together.
Yoda and Darth Bane in Clone Wars
The Jedi's Knowledge of Darth Bane
While this scene may seem relatively insignificant, it actually creates a serious continuity error since Yoda says that he knows Darth Bane created the Rule of Two. After Darth Bane died, the Jedi believed that the Sith were extinct. He was deemed to be the last Sith Lord, which is why the Jedi didn't recognize the Sith influence until Star Wars: Episode I - The Phantom Menace. The first thing that is odd, though, is that this builds upon The Phantom Menace in establishing that Yoda knows Darth Bane started the Rule of Two. This means that it's likely common knowledge among the Jedi, and probably has been since before Darth Bane's death over a thousand years ago at this point in canon.
Split image of Jedi vs. Sith, and Darth Bane from Star Wars
The Jedi must have known about the Rule of Two before Darth Bane's death. After all, they didn't know about Darth Bane's apprentice, Darth Zannah, so they couldn't have learned it from her. They also couldn't have learned it from another Sith as, until Darth Sidious appeared, the Jedi believed Darth Bane to be the last Sith Lord. Given that they knew about the Rule of Two, it stands to reason that the Jedi should really have expected Darth Bane to have an apprentice. This is further evidenced by the fact that in the prequels the Jedi explicitly reference the Rule of Two as an objective fact about how the Sith operate.
Darth Bane looking menacing in Star Wars Sith
This was always the central problem with the Rule of Two. It is made worse by Star Wars: The Clone Wars season 6, which confirms the Jedi clearly knew that Darth Bane had followers after his death. After all, they were aware of his tomb on Moraband. The Jedi wouldn't have constructed this tomb themselves. It is established in canon that the Jedi Order kept Sith artifacts well hidden and bound by the light side of the Force in Jedi Temples (including the one on Coruscant), where their dark influence couldn't wreak any more havoc on the galaxy. Only the most skilled Jedi Masters with the highest level of clearance were able to touch Sith artifacts. The security around anything related to the Sith was a top priority for the Jedi, and they certainly wouldn't have sent Darth Bane's body to a Sith temple.
Split image Of Yoda, Darth Bane, and Darth Plagueis
The Mystery of the Extinction of the Sith
The only logical conclusion, given the fact that the Jedi would know that Darth Bane should've had an apprentice, is that they thought Darth Bane's apprentice was killed around when he was. They didn't know about Darth Zannah's existence, so presumably they thought Darth Bane's apprentice had already died. Alternatively (as in Star Wars Legends), this could have been a case of mistaken identity. If the Jedi thought that someone else - potentially an acolyte of the Sith or a Dark Jedi - was Darth Bane's apprentice, it would explain why they believed the Sith had died out. However, this doesn't account for Darth Bane's tomb on Moraband.
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This poses an issue because the Sith could never truly be extinct if their teaching endured. The very acolytes who build that tomb - whether Force-sensitive or not - could have passed on the ways of the Sith. The Jedi should never have believed the Sith extinct, because there were easy ways for Sith teachings to be passed on. The fact that the Jedi didn't once in a thousand years think of checking up on how Darth Bane was buried causes a serious continuity issue.
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It doesn't make sense that the Jedi assumed Darth Bane was the last Sith given the events of Star Wars: The Clone Wars. The only current explanation is that the Jedi are less competent than they should really have been. However, this issue could potentially be fixed if Star Wars were to confirm the death of whom the Jedi believed to be Darth Bane's apprentice, followed by the successful arrest of non-Force-sensitive acolytes after the burial of Darth Bane and his assumed apprentice. This, at least, would give a plausible reason why the Jedi assumed the Sith were extinct. It's messy, and so far there's no evidence this is what happened, but it's the only explanation that fits.
A cropped section of Knights of the Old Republic 2's key art, showing a Jedi dueling a Sith in the background with T3-M4 and HK-47 off to the side, and Darth Sion brandishing his lightsaber in the foreground.