The Intro in Makoto/Minato’s story starts with Makoto visiting the Velvet Room apparently AFTER the time of the Typhoon/cancelled festival, and Elizabeth mentions that she feels like she “
had a dream in which Makoto met “those” people, but she isn’t sure if it was real”.
As she says that, Makoto briefly hears Yu’s voice in his head, saying:
"We’ll meet again some day. I’m sure."
After that, the rest of the game appears to be a flashback.
This most likely confirms my theory that the Events of PQ are in-canon, but erased from the characters’ memories in a “Kingdom Hearts: Chain of Memories”-esque way.