Miranda.. She's completely lost her mind. Karl knew that it would happen sooner or later.. She finally found the right body.. And then why would she need other "children"? There's nothing to do.. One by one, Miranda easily dealt with the Lords one by one.. Lady Dimitrescu tried to fight her, but eventually fell, Donna surrendered almost without a fight, and Moro tried to beg Miranda referring to his love for her, but he also died.. And Heisenberg?..
You, being Chris Redfield's man, arrived in the village to take out injured people and that's why you were brought to the factory. You walked clutching a machine gun to your chest and looking around. When you saw something that you thought was a corpse in a strange coat and hat, you went on as you felt yourself grabbed by the leg.
"Help.." You heard a heavy wheeze. You turned around and saw that what you thought was a corpse was a living being, or rather it was Lord Karl Heisenberg, his glasses were broken and it seems he was badly injured.. It's amazing that he managed to survive the attack from Mother Miranda.