FF7R* [EP.59/36] I'm Super Dead | No Commentary | Let's Play | Final Fantasy VII Remake

From the door of Leaf House, turn around and follow the alley to the left and you’ll find Oates next to a Materia vendor (which sells the Costa del Sol song). Speak to him and he’ll head back to Leaf House to see Aerith.

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At this point, you can return to Leaf House, as Aerith will be done setting up the flowers there. Head inside to find a chest with an Ether, then approach Aerith to learn about someone scaring the children.

Oates will volunteer to take Aerith and Cloud to see the strange man, so follow him down the alley leading to the Materia shop and sidle through the small gap just ahead to find the children’s hideout.

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Danger in the Hideout
Chest: Moogle MedalOpen the chest on the right to obtain a Moogle Medal.
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Head left along the path and duck through the hole in the fence to enter the Undeveloped Area.

Recommended MateriaYou’ll be attacked by lots of Hedgehog Pie and Wererat enemies in this area, so it’s a good idea to have at least one of your party members equipped with the Ice Materia.
As soon as you enter the next building, you’ll be attacked by three Hedgehog Pies, so clear them out, then drop down the ladder just ahead and you’ll encounter a group of Wererats and a Hedgehog Pie. Use Ice and area melee attacks to take them out quickly.

Chest: Mega-PotionHead up the ramp to the right to find a few Shinra boxes and a chest with a Mega-Potion inside, then head back down the ramp to the previous area.
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Take the path forward across the bridge and Aerith will draw your attention to the children in the distance (forced into hiding by a Hedgehog Pie and Smogger)

Continue across the bridge and sidle through the small gap to reach the next area, where you’ll need to take out a group of Wererats.

Recommended MateriaIf you don’t have Lightning Materia equipped, equip it now, because you’ll be pitted against several hard-hitting Smoggers in the next fight. Don’t unequip your Ice Materia, however, because there are still plenty of Hedgehog Pies to deal with. Smoggers can also deal various status ailments, so equip Cleansing and Healing Materia as well, if you don’t have them equipped already.
Continue further into the area to find more Wererats and Hedgehog Pies. Take them out and then follow the path left and drop down the ladder into the large clearing. Turn left and you’ll happen upon the Smogger and Hedgehog Pies.

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TipHave Aerith cast an Arcane Ward down in an area where there is plenty of room to move. The Arcane Ward causes each spell cast while standing in it to happen twice, meaning you can save MP and hit/heal harder by casting Thunder and Cure instead of Thundara or Cura.
After you take out the first group, another wave of Hedgehog Pies will appear. After those are defeated, there will be two Smoggers at once.

The Smoggers can deal heavy damage with the red explosive areas they create, and they can cast Silence, Poison, and Berserk, so use items or the Cleansing Materia to stay on top of ailments, and abuse Thunder while standing on the Arcane Ward to make quick work of them.

After the fight, approach the ledge by the river and Cloud will jump over the save the two children.

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Escort the Children
After returning the children to dry land, return to the ladder and climb it as you make your way back to the slums. You’ll be ambushed by a single Smogger after climbing the ladder, so take it out, then move away before it self-destructs. Continue up the slope and sidle through the gap, then cross the bridge.

Read more at https://www.ign.com/wikis/final-fantasy-7-remake/Chapter_8_-_Budding_Bodyguard#Chest:_Moogle_Medal_2