"This is a failsafe to ensure you do not neglect your rehabilitation. It's intended to push you into performing executions. We call it a 'Fusion Alarm.'"
The fusion alarm is first unlocked (and activated) when the party finds a route to the Treasure in Kaneshiro's Palace and attempts to leave. The fusion alarm is an event triggered by winning repeated battles in the Metaverse, be it regular battles or victories gained from utilizing the Instakill perk from the Chariot Confidant, or by requesting a Celestial Reading from Chihaya Mifune for a fee if the protagonist has unlocked her 9th Confidant rank. When it is triggered, a visual of the Velvet Room's cell door will appear with a red glow, giving the protagonist an "uneasy feeling," and he will give an internal reminder to himself when visiting a Safe Room when a fusion alarm has been triggered.
During a fusion alarm, the color motif of the status menus in the Velvet Room will change from blue to red, an alarm will briefly play for a few seconds, the transition screen into the Velvet Room will become red, new voice lines are used for Caroline, Justine and Igor, and the Twin Wardens will have a new idle animation in the room.
During a fusion alarm, Personas will gain more stat values, different skills and max skill inheritance slots. Using Guillotine, Electric Chair or the same execution method multiple times will cause an accident. An accident may also occur if a Persona made during an alarm is then used as material. But there is a chance that the stat values might increase even more.
The fusion alarm ends whenever an accident occurs (which will then lead to the protagonist being forced to leave), or by speaking to Justine. During a fusion alarm, one cannot show or ask Justine about the Personas the protagonist needs to have in order to progress the Strength Confidant.
Fusing Personas will now grant it additional stats boosts. The level of Treasure Demons are treated as 5 levels higher than they will usually be, allowing stronger Personas to be fused with them. When one performs such a fusion, skills have a chance to mutate into different or stronger skills (such as Null Ice transforming into Repel Ice). A Persona fused during an alarm will have its name written in gold for the remainder of the alarm. This also applies to network fusion.
If a Persona with a gold name is used in another fusion, an accident will almost always occur (with a stat boost happening otherwise). If an accident occurs, the new Persona will have a multitude of similar skills and a matching Trait, similar to a Treasure Demon, for the purpose of fusing with another Persona, with the abilities being similar to each other (such as every single evade skills, multi-hitting ailment skills, skills with a high chance of critical plus Rebellion and Wage War, ailment abilities, etc.).
Any resultant Skill Cards will grant a stronger ability (either progressing from a single-target skill to a multi-target skill of the same strength, or a multi-target skill to a single-target skill of a stronger strength). Accessories will grant a stronger ability or extra stats, and weapons and armor are now stronger, though a weapon's inherit accuracy remains unchanged. If an accident occurs, it's possible to obtain powerful incense to use in Lockdown, a new accessory with a different ability, or a Skill Card that normally cannot be obtained.
Experience gain is increased, and it's possible to have the Persona obtaining the experience obtain multiple abilities from the sacrificed Persona. Should an accident occur, the Persona will gain 10 stat points distributed randomly into the attributes.
The stat bonuses incense gives to a Persona in Lockdown are doubled.