Ok so yeah the bugs probably just thrived and took over mistlands without the Jotunn.

Who got rid of them? Why not Odin? Maybe Odin saw ungratefulness in the Jotunn or they were actually growing in power that he didn't like and smite them before they could be a bigger problem than the forsaken trapped in valheim.

That's why Odin whatches the player at night to see if your getting too cocky and powerful and if the player needs to be smite down.