Can anybody explain whats going on? I simply dont get it(⊙…⊙ )

They were all playing, the tapes made them remember that they were people and not npcs.

Something happened with Bada's tape that his memory is not working correctly. He remembers being a player but doesn't remember that his cousin and friend were playing with him. The rest os them are at times remembering that they are players (when someone saves their tape) at times behaving like NPCs (when their tapes are not saved)