It's more of a sequel than any of the other sequels in the series.
That's not quite right.
Sure, there are many more allusions to the first movie. But it's still not a sequel in the classical sense.
The first six movies are supposed to play in the same universe: It's a string of events that happens over a longer time period in the same universe. Even if the plots are not that much connected in some cases, it's still the same world.
"New Nightmare" on the other hand plays in another continuity altogether. A continuity where the previous movies are just movies.
You cannot really use the ties between the movies to answer the question if it's a sequel:
"Fray the Vampire Slayer" plays in the distant future, having very few ties to "Buffy the Vampire Slayer", but it is a sequel because it tells what happens in the Buffyverse in a few hundred years.
On the other hand, a movie about a bunch of "Buffy" fans traveling through the country to attend a convention is
not a "Buffy" sequel, even if this movie has 1000 allusions to the original series.
Nancy's diary may have no impact on the plot. But it establishes that the events of "Nightmare 1" happened in the same world that "Nightmare 2" plays in. The world of "Nightmare 2" is the world of "Nightmare 1" five years later.
On the other hand, in "New Nightmare", all the ties to "Nightmare 1" are just allusions to things that happened
in a movie.
Sure, you need to know the first movie to fully understand "New Nightmare". But only in the way you need to know the game "Donkey Kong" to understand the documentary "The King of Kongs". But "The King of Kongs" is surely no sequel to Mario's adventures.
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