Why on Earth is there a timer for retrieving items after being demolished?

[Jojoya]

And how does it work then? Instanced data is clouded somewhere else?

I'm not a programmer to know the specific technical details. The simple explanation given to players is that instances are load on demand (when a player is ready to enter). The data for the instance is retrieved, it's created and the player goes in. The player leaves and the instance is removed (assuming no other players are still in it) so there is room for the instance server to create a different instance for a different player.

There's nothing new about this. MMOs have been using instance technology for various portions of their content for decades.