I either forgot or never heard about it but Prison City? That sounds really cool. Makes sense if they are going for a "dire" vibe if that's the case.
I was interested in the story but now I am hyped.
They released a map of the Prison City the game takes place in. As you can see, the big-ass prison is on the top right there.
The 'blue-haired Adol' you have seen in promo material for Ys 9 is because he starts the game on the run from the series mainstay, Romn, and the Romun army so he dyed his iconic red hair to stay in disguise. Balduq is a Romun prison city. So yeah.
From the wiki:
"Ys IX: Monstrum Nox takes place in Balduq, northeast of Esteria in the Gllia region under Romun control. Balduq is known as 'the prison city' for its large prison facility inside the town and its architecture featuring high walls as a result of being built upon the fortified era. Furthermore the city is an important nexus for transportation in the region resulting in a wide range of inns, bars and trade centers. In more recent years public facilities such as theaters and baths are starting to be developed too.
In more recent years rumours of beings called "Monstrum" are said to have started appearing creating a huge fuss with its residents. The Monstrum are said to possess unique supernatural abilities, some of them seem to be helping the poor and helpless, others are outlaws up to no good. This dichotomy results in the villagers becoming scared/wary of them.
Balduq Prison, located at the edge of the city, supposedly is the largest prison facility of the Romun empire. Originally it was a fortress built to protect the Romun border, it is more recently that it has been repurposed as a prison facility. Featuring only one entrance through a drawbridge and surrounded by steep rock walls and deep moats it is said to be inescapable. The townsfolk does not hold the prison facility in high regard as the facility also is used to detain critics of the empire as does it detain political prisoners."
The Monstrum include the demihumans in your party.