I always thought that since Tsumugi was the one to bring up Kaede’s supposed twin sister, she was trying to mislead the investigation by trying to connect it to THH by insinuating that Kaede or her sister were actually the mastermind. I mean if my memory serves me right, the group fully believed that THH had happened and the mastermind was a member of Ultimate Despair.

As for the flashback showing the very beginning before they had their memories changed, I simply just thought it was the same way that Kaede was the first blackened. By hiding info from the players and cutting out parts that we weren’t supposed to see yet. Honestly, there isn’t a very safe way to show that scene because if they showed that later in the game then most people would’ve forgotten about it, but playing it at the beginning, most people wouldn’t pay any mind to it cause of what is going on in the story. People might’ve just assumed that the story the flashback lights were giving them was the truth.

I understand your dislike towards the ending, I mean I disliked that and the twist for similar reasons, but after giving myself some time with it I grew to be ok with it. Each of the games try to end with some form of ambiguity to it. And because if that maybe it’s ok for it to be the most separate entry in the series since it let’s people theorize about it, whether to figure it out, or to help them cope with the ending by making it better in their eyes.

I don’t know if anything I typed makes any sense, and I definitely feel like I started to ramble on at the end but that’s kind of the best way I could try to describe some of the pieces mentioned in the post.