This is the official answer from me on what fixed the issue.
If you run into this same situation(rare case really) this is how it was fixed.
The background: MBP 2016 with TB, updated normally, converted to APFS and had at one point windows running on it with bootcamp.
I decided to format the drive and reinstall clean because i had a lot of clutter on it and moved everything to cloud, so i can have more space.
Followed the apple guideline and made a bootable installer USB.
Followed the erase process, and in the middle of that my MBP crashed with a kernel panic.
Kernel panic happened with disk utility and terminal. Tried multiple methods.
My APFS container was damaged and disk utility was unable to resolve it.
The OS was gone, it was not booting. The only sign on the screen was a circle with a diagonal line in it. Recovery still worked.
Took it to apple store and started working on it with genius bar guys.
After 3 hours most of them gave up and said needs an ssd repair because this is a hardware issue($800). I was thinking differently, because it was fine a few hours earlier. Then another genius came up with an idea that became the solution.
We connected another macbook pro with a thunderbolt cable to mine, and turned mine on while holding T.
This way we tried to format the drive using the new macbook pro's disk utility.
Surprisingly worked, and was able to format the drive in HFS in 15 seconds.
Install still crashed but we were able to use my disk utility and reformat to APFS, and run the installer again. Crashed again.
3rd time we did PRAM and NVRAM reset, run the installer again and no crash, Restarted, with apple logo and a timer.
Finished with a working OS and booted to the welcome screen.
Currently its still running, and the partition table cleaned up.
If you watched my video, the ghost drives from diskutil list disappeared.
The only thing showing now is the current new APFS container, with correct names and sizes.
Drive speed test shows good speeds, no crashes so far. Installed some apps and updates.
I will update this thread if another issue comes up but hopefully it will stay stable for a long time!