This episode hurts. Paul isn't having fun, his reactions to everything is a reminder to me that this stuff isn't nearly as intriguing to him as it is to me. He's living this, he gets the deal now. I remember being really confused and overwhelmed when I first watched the beginning of this episode, where Paul manipulates the game's recordings to get into the bedroom. I didn't fully understand the deal with the world being different in DEMO playbacks. I get that now, though, and did last time too.
My personal belief on Paul's conversation being in the game is that his end was a near exact quote of what he said, and that Anna's lines weren't from anything ever really spoken. The in-game representation of her has been written to react to Paul's dialogue being where it shouldn't. Imagine if a conversation you had a long time ago was in a game you played. I was having a conversation the other week about that, the technology for something like a horror game to put that into effect is getting there. I think for it to work it would have to be perfect, like how a human would. A human edited Petscop, anyway. Jill, maybe, or Anna, since she was tied to Garalina. An AI just couldn't get it exact, any imperfections could totally butcher the effect. You can't just try to do a smaller version of the trick by giving a textbox and having the input resurface later, because when you give somebody a textbox they'll try and do something funny. The next closest thing would be the game spying on messages you send. ...Oh, also, maybe don't try any of these things. That sounds illegal to me.
One last little note: Explore-min is in this episode! The full version of explore from later is my favorite song in the series, I like how it's like a second phase.