Fans have been given an avalanche of mysteries in the premiere of Avatar: Seven Havens, but by far the biggest is how there are two Avatars. Something that shouldn't be possible, but the most common theory so far has to do with Vaatu receding into Raava in the finale of The Legend of Korra's Book Two: Spirits.
When Korra died sometime before the events of Seven Havens, she died with Vaatu still inside Raava, something that had never happened before. When Raava moved on to her next human host, it's possible that Vaatu became separated from her early and inhabited his own host, which happened to be one of a pair of twins: Pavi and Nashi.
As for how Vaatu's human host could bend all four elements, unlike that loser Unalaq, it goes back to the finale of Book Two: Spirits. After the then-recently destroyed Raava was forcibly pulled from Vaatu's essence, he was immediately destroyed, with his darkness retreating into Raava as her light had briefly retreated into him. It was then that Raava re-fused with Korra, restarting the Avatar cycle.
It should be clear that Korra could still bend air and water despite Raava being separated from her, which presumably meant she could bend fire and earth, too. Raava's destruction by Unalaq also meant the end of her and Korra's connection to the previous Avatars. Upon Raava's forced rebirth, it's likely she didn't possess any of the four elements herself anymore, not until she fused back with Korra, and since Vaatu was inside Raava at that time, the four elements were likely imprinted onto him as well.
Who Is Vaatu's Host? Pavi Or Nisha?
Nisha
The most blatant evidence of Nisha being Vaatu's host is her name, which literally translates to "darkness." Not to mention her dark-furred animal companion, Ruhi, just to double down on the obvious theming. Her fighting style was also described as straight-up "chaotic" in Episode 3, "The Order," in contrast to Pavi's non-combative nature.
Beyond that, what little evidence there is almost feels too obvious, almost like a red herring. However, it would be tragic for Nisha if she were Vaatu's host, since she's the twin who most wished to fulfill her duties as the Avatar. So, it would horrify her to learn that she was actually the Dark Avatar.
Pavi
In contrast, there is actually a shocking amount of clues pointing to Pavi being Vaatu's true host. When Nisha learned in Episode 2, "Into the Storm," that Pavi could also bend all the elements, she asked her, "But if I'm the Avatar…what does that make you?" She also has an oddly familiar-looking tree in her makeshift home, which resembles the Tree of Time, where Vaatu was sealed away. Perhaps Pavi subconsciously felt homesick for a prison she never knew.
There's also the flashback caused by the energy spirit in which a younger Pavi appears to be hurled through a portal as patterns appear on her body, similar to how Raava's pattern would appear on Korra when accessing her power.
Finally, not only would Pavi's peaceful nature literally make her the Yang to Vaatu's Yin, but it would be an incredibly ironic fate for Vaatu to be stuck in the body of a pacifist. Pavi being Vaatu's host would also make Nisha's assurance to her in Episode 3 that they "can be the kind of Avatars we want to be" all the more powerful.
