I really have no idea what happened here.
Actually, this comes off kind of like a generic script that someone just decided to make into a Leprechaun movie. I haven’t found any confirmation of that or any hint to it at all in any trivia pages online, but it would not surprise me in the slightest. The Leprechaun is only ever called an alien, he doesn’t really act himself, and the big climax has nothing to do with his magic. It has to do with magical future technology, and what it would do with a generic nondescript alien monster.