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When both of them first cast it, the Moon was shining brightly but then the light subsided.

Then Madara came down to hunt Team 7. At that moment, if the moonlight was already absent then why didn't the once caught into the infinite Tsukuyomi escape out in the absence of the moonlight?

Same goes for Kaguya...why did she wake up some of the people that were caught in the infinite tsukuyomi and erase their memory when from the starting she wanted to use infinite Tsukuyomi to put mankind under a genjutsu?

When the moonlight stopped shining, shouldn't all the people in both cases escape out of the genjutsu?

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I did not have information for Madara, but in case of Kaguya she voluntarily freed some people, as per this link, she did not want to perish the human race, also because of her power she was worshipped as goddess and began the "Ritual of divine tree" by which she collects the Chakara of people.

As per the naruto series all the chakra originated from the divine tree and Kaguya who ate the fruit and then used by all mortals in various forms.
Kaguya collects the chakra from ritual and provide it to the tree, thus to get more people she erase the memory of people she caught they will not know the past and eventually more people will be gatherd.
Check this link regarding divine tree and episode 460 plot

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Everyone, bar Team 7, Madara, Zetsu-Obito, and the Edo Tensei dudes, were wrapped around in cocoons after Infinite Tsukuyomi. Even if the moonlight faded, they wouldn't be able to break out. Even the Edo Tensei Hokage tried to break the cocoons, but they kept regenerating.

Ichigo's answer regarding Kaguya is correct. I would just like to add that Kaguya's purpose for trapping people in cocoons was to turn them into her own personal army of White Zetsu, which could help fight back against Momoshinki and Kinshiki. Letting some of the human free meant that they could repopulate the Earth, allowing her to create more white zetsu once again.

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