> Entropy is always increasing in a closed system
Only if that system isn’t already in thermodynamic equilibrium. A closed system that reaches thermodynamic equilibrium has maximum entropy.
Why the universe as a whole didn’t start out in thermodynamic equilibrium, i.e doesn’t have maximum entropy is something we don’t understand.
Maybe it's not a closed system.
https://en.wikipedia.org/wiki/Black_hole_cosmology
I'm partial to the hypothesis that our universe is actually a giant black hole in some kind of larger universe. The Big Bang was really the formation of our universe's event horizon. Cosmic inflation is the result of stuff falling into our universe, adding to its mass-energy -- there is no dark energy, our universe is just accreting mass-energy from something larger.
As for what the larger universe looks like -- in this model it may be impossible to know because the event horizon is impenetrable. It could be a much larger universe or it could be something else, like a higher dimensional one.
If it were so, there would be no one to ask that question.