Save your progress and watch a cutscene, then continue exploring. Exit the house and look to the left. Go down the path beneath the leftmost red arrow; there is a purple item on the water. Follow the middle red arrow to the end to find some Dust. After collecting the Dust, go to the house indicated by the right red arrow and pick up the material on the left side of the house.
Next, return next to the house and climb onto this pipe.
Walk through the pipe and talk to this NPC.
After speaking with him, you will receive the book ["Four Fiends Axe" Case File #5: Gu Lingran's Letter to Sect Leader Ming (Draft)].
