hag.

Hey, so if you go and kill her, you can speak to her corpse. She says some crazy stuff including the fact that she has prepared for her death, this leads me to believe she has a way of coming back.

On my current playthrough I was rushing through with a drow dual wielding fighter. I spoke with her and traded with her ( i think I haven't talked to her in the groove as a trader beforehand) After the trading was done i swarmed her with my party particularly basic stuff me playing drow dual wielding battlemaster fighter, shadowheart , gale and astarion as thief rogue dual wielding a +1 shortsword and a dagger. I popped bless on all and a potion of strength i bought from the hag herself and attacked her in her granny form which iniated a fight. She got feared from the battlemaster attack, I popped a haste potion and focused all my attacks on her, including guiding bolt and magic missiles level 2 spam on her. Through fear CC i killed her on the spot and then proceeded to kill the red caps.
Interesting things happen once she has died this way.
1. The lair effects such as poison clouds dissapeared.
2. The people with the masks I could talk to (maybe you could save them. I 'd have to replay to confirm)
3. A 2nd body of the hag appeared in the proper boss room area with the cage.
To which I could cast speak with dead and she reveals additional dialogue about her plans with the unborn child.
4. A new option popped up after getting Mayrina out of the cage. ( The plans the Hag had for the baby)
5. She gave me a necklace as a reward.
6. A new dialogue option occurred in the end area with the coffin of her husband.

So i've killed the hag a few times, discovered that during combat, around 50% health(?), Hag will break the combat and start to talk, if Wyll the human warlock is in your group, she will suggest a deal to save her life. She will offer more power to the warlock to make him a hero with much power and flee with the girl, although when i wanted to try out WHAT kind of power she talked about when I didnt want to waste a solid save, I couldn't get her to talk anymore.

The way she speaks about the baby, I think she is trying to use it to reincarnate so she does not die. Reminds me of Flemeth from Dragon Age.

If you get her health low enough she offers you a deal. Plus 1 to one of your stats of choice. In return you can't kill her and she gets to leave with mayrina. But with a high enough skill check you can even save the girl to.(patch 6)

Pro tip - use witches bolt and tag her before she starts creating dupes. The bolt will stay connected to the real one.

make sure to toggle nonlethal attacks on (only works with melee attacks, not spells or ranged attacks) to get the hair guaranteed every time (if you want to)

The power she talks about is a piece of her hair. This is a consumable (much like Volos Ersatz Eye) that boosts a single stat of your choosing by 1.

So for example, Laezel starts with a 17 in str. With this, you can get her to 18 (+4) and then use the ability score improvement at level 4 to either increase str to 20 (+5) or get Great Weapon Master.