Though everything is destroyed during Pralayam (deluge), Swami Desikan reconciles that Bhagawan can still create new waters and trees for residing.
Some say that Allilai Kannan did not appear during the grand deluge. It is an intermediate pralayam when the worlds get destructed but few like Saint Markandeya survived and worshipped the Allilai Kannan. So, this would not have occurred during Mahapralayam.