Anyone who, like Ally on AHS this season, has a legitimate fear of clowns might not like where the season is already heading, but with the return of a favorite like Twisty, you have to respect the very real horror coming at viewers this season. But since it’s been difficult to decide what’s real and what the characters are imagining, fans are probably asking, is Twisty real on AHS: Cult? He was a favorite bad guy from AHS: Freak Show, but in that season, he was killed by Edward Mordrake, rendering him impossible to return to another season unless he was in ghost form.
And since Ryan Murphy made it clear that AHS: Cult would have no supernatural elements, there’s really no way that Twisty could be real this time around. Instead, since the season is about terrifying clowns, it would seem that they’re using Twisty as a way to play on Ally’s fear of clowns and Oz’s apparent night terrors that seem all too real to viewers. The first time Twisty was shown this season was in a cleverly placed callback to Season 4, when he murdered two picnicking teens in a 1950s scene that basically showed how urban legends are born. But it turned out that it was only taking place inside Oz's comic book, making it evident that Twisty is not going to be a physical presence on the show, but rather a looming memory of what he once was.
In the promo for AHS: Cult Season 7 Episode 2, you see a shot of Twisty yet again, only this time he’s trying to get into Oz’s bedroom with the other clowns that have been shown so far this season. But like Ally’s hallucinations (or were they?), it’s another way to confuse and elicit questions from viewers.
We know that Ally has a handful of severe phobias and that Oz may or may not be experiencing some of the hallucinations she has been as well. It’s already been established that he has night terrors wherein he doesn’t even realize he’s sleeping, so mix that with a phobia like his mom’s and you have enough nightmares about Twisty to make him feel like the new Freddy Krueger for poor Oz. But I don't think he'd be able to physically harm the poor kid. Mentally, on the other hand, is a completely different story.
At the end of Season 4 of AHS, Twisty’s story was finally told and it was actually a pretty tragic one. Originally, Twisty’s main goal as a clown was to entertain and delight kids — not scare them. Naturally, the other carnies were jealous of his attention and spread the rumor that he was touching little kids, which completely tarnished his reputation and left him miserable.
After trying and failing to kill himself with a shotgun shot to the face, he became Twisty. But the thing is, he’s never been about killing kids, though he may have done so a few times anyway, but instead "protecting" them from unfair parents or spiteful older siblings, as seen in AHS: Freak Show. Going by this logic, he likely wouldn’t be trying to get into Oz’s room to kill him, even if he was real.
Assuming that the clowns Ally’s been seeing are actually real, since hallucinations are too easy of a copout, it would make sense to further confuse viewers with Twisty’s reappearance in the season about scary clowns. But since he already died decades ago and Season 7 is supposed to be more realistic than past seasons of AHS, Twisty probably isn’t real on AHS: Cult. Thank goodness.