So, I was playing with both Glaaki and Dagon the other day and unfortunately Glaaki woke up. During the final battle i noticed something that (if true) is one of the best (worst for the investigators) combos I've ever seen.

When Glaaki attacks the terror level increases by 1, and whenever the terror level increases by every investigator must spend a clue token or else a doom token is added to the doom track, due to Dagon. So every turn Glaaki is regenerating like Cthulhu and draining clues as well as attacking!!!

Is this the real way it was supposed to work, or when the AO wakes up the herald's abilities stops?

JitB,

I believe most players remove the Heralds (and Guardians) once the Final Battle begins.

The Professor

The Professor has got it. While later expansions seem to have forgotten the original herald rule from King in Yellow, heralds (and by extension, Guardians and Institutions) are supposed to be removed from play when the AO awakens. Their respective components, such as Blight cards, remain in play.