Eureka 7 AO was a terrible disappointment. It looked like something made by fans, that is it completely ignored the original story except to steal random bits from it. Then it went on to introduce standard japanese cliche (super powered evil avatar of truth flying around) that made no sense. The confusing part was that by the end it seemed to want to set itself up as a prequel even though it had elements from a (crappy) sequel.
It was more of a side story and not a direct sequel to e7 it has a different primary cast and the characters from the previous series are all basically gone except Renton and Eureka. Truth was a secret that reverted to human form after eureka teleported all the scub quartz when she traveled to their universe the first time because it didnt know what to do when the quartz disappeared. He basically went crazy when he finds this out and wants to use the quartz gun to redo history so he doesnt revert or something. I dont see how you thought it was set up as a prequel. Not necessarily saying it was good, I didnt really enjoy it either, but that stuff was explained in the show.