While it seemed as though the kids had defeated the creature's physical form at Starcourt Mall, they had lost without knowing it. Vecna used the attack to steal Eleven's powers.
We know Eleven was born in 1971, which means her mom got pregnant with her during the tests, sometime in 1970. A 1959 flashback in the mid-season 4 finale reveals a 12-year-old One (Jamie Campbell Bower). That puts One, a.k.a. Vecna, as 24 when Eleven was born.
"I saw a means to realize my potential to transcend my human form, to become the predator I was always born to be," Vecna tells El.
What does Vecna want with El? In his twisted mind, Vecna believes that he his helping the world by wiping out humans, as a "predator, but for good." When Vecna asks for El to join him, it's because he also sees her as a predator, "better" than humans.
"I walked up to her [as Vecna] and she burst into tears. She wouldn't look at me and she was visibly just disgusted by the whole thing... After she cried and I made it obvious that she knew it was me, one of the things she said was that, 'I knew it was you when I could smell cigarettes,' because I'm a smoker."
Vecna successfully stole Eleven's powers when controlling the Mind Flayer in Stranger Things' season 3 ending, which finally allowed him to emerge stronger than Eleven and enact his plan to take over Hawkins with the Upside Down.
While intending to get his revenge on Eleven and Brenner, Vecna also goes after victims who have dealt with traumatizing experiences in the past (reminiscent of his childhood and his time at the Hawkins lab).
"Vecna seems to be actually intrigued by Nancy being able to figure him out, to be able to get this close to the truth... I think this is more Vecna's narcissistic traits that pull him to Nancy, why he wants to give her this information."
His first three victims — Chrissy Cunningham, Patrick McKinney, and Fred Benson — are all peers of The Party, people they know from school, which makes Vecna's terror all the more real.
Realizing he had tremendous psychic power, he haunted his family with visions before ultimately killing most of them. His father was framed for the murders and locked away in a mental hospital as a disturbed serial killer. Henry then found himself in the care of Brenner, who decided he wanted more kids like the boy.
The first known human contact with the Upside Down was in 1979 during Eleven's fight with Vecna. During the match, Eleven was able to overpower Vecna, using her psychic abilities to keep him pinned to the Rainbow Room wall as his body disintegrated.
He's the infamous Number One, but had his powers blocked and worked as an aide in the Hawkins National Lab. He befriended Eleven at the lab and not knowing Vecna was evil, Eleven restored his powers resulting in the massacre and his expulsion to the Upside Down.
Vecna's obsession with time appears to be linked to his hatred of humanity. He views time as a human imposition on the natural world; an attempt to impose order on nature.
In the series, Eleven is shown moments from her past at Hawkins Laboratory, right up until she manages to banish Vecna into the Upside Down.
Ultimately, it is revealed in Stranger Things season 4's finale that the reason why Vecna was killing Hawkins teenagers was to create a massive gate that merges the Right Side Up with the Upside Down - and he specifically needed four bodies to do so.
It's probably safer to say that Billy was chosen as the Mind Flayer's first victim because of his fragile state of mind. He was constantly angry, overwhelmed by his abusive father, and became abusive himself in return.
The theory predicts that Vecna wants to regain his human form, and he will use Will to do so in Season 5. Knowing that Vecna singled out Will in Season 1, it's a reasonable theory, but it might go too far. After all, Vecna already has a human form, and he has vowed to eliminate humanity.
When One massacres the rest of the children in Hawkins Lab, Eleven banishes him to the Upside Down in the same way she banishes the Demogorgon from season one. One is sent hurtling through the Mind Flayer's lightning and is horribly disfigured, transforming into Vecna.
As Vecna, he uses these mental abilities as a way to psychologically weaken and lure in his victims – much in a way that Pennywise, Freddie Kruger, and Pinhead do. (All of which have been cited by show creators the Duffer brothers as inspirations for the villain.) But he does have a surprising weakness: music.
Unlike the reporters at the Hawkins Post, Fred treated Nancy with respect. Though Fred appeared to be bright and level-headed, he harbored extreme guilt for his role in the fatal 1985 car accident, and believed many people look at him as a "murderer." This guilt and mental unrest made him a target of Vecna.
Sharing more about Eleven's real father Andrew Rich could be a great way to wrap up the story.
Eleven has a memory during this episode and realizes that 001/Henry Creel (Jamie Campbell Bower) wants her to join him on his evil journey, and she banished him to the Upside Down. 001 then transformed into Vecna, the horrifying Stranger Things villain.
Angela also held no remorse for her cruel actions and did not hesitate to violate boundaries, making fun of Eleven's deceased father, which led to Eleven retaliating, striking her in the face with a roller skate.