I've seen a related question answered here about you not being able to permanently close a location as "empty" while a monster is held by the Medusa Mask, because the location isn't really empty.
My situation is different. I held a monster with the Mask, then encountered and defeated a Henchman, and successfully closed the location that way. I assume the held monster gets banished at the end of the turn?
Btw, the answer to this is also relevant to this thread, presently unanswered.
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If the card counts as in the location deck to prevent the location from being empty, I'd say it also counts as in the location deck for all other purposes (though not as the top card of the location deck).
If you succeed at meeting the When Closing requirement, search the location deck for villains. If you find any, banish all non-villain cards from the location deck. The location is not closed—but at least you know where the villains are!
That searching the location and then banishing any non-villains would include any cards on top of the Medusa Mask too.
Okay, that makes sense. Thanks, Hawkmoon.