I've seen a lot of people misunderstand parts of the CLI sequence, and wanted to throw my support behind this analysis because I think you basically nailed it.
I finally decided to do a character-by-character transposition of that final screen to copy down EVERYTHING we can glean, and noticed something interesting.
For those unfamiliar with Command Line Interface (CLI), it uses a fixed-width font, so every letter is the same length. This allows us to count how long certain words are, even if we can't read the whole thing.
Additionally, users are defined as <username>@<domain>. You'll be familiar with your email address following the same pattern, and in this case it's kinger@circus. Any lines he types start with "kinger@circus:~$" to show who it is, where they are, the ~ means it's the home directory (not relevant), and the $ indicates the system was waiting for his prompt.
The system output lines starting with "$:" isn't realistic, as lines printed by the system usually start without any prefix. I think the $: was added for the sake of making it clear to viewers when the system was responding to Kinger.
If you look throughout every CLI segment in episode 8, almost every single line begins with either "kinger@circus:~$ " (17 characters long), or "$: " (3 characters long). I found exactly one that doesn't, though. It's very obscured so we don't see most of it, but this is the best shot I could find:
The "DELETE THIS M***********" line has a prefix 8 characters long that doesn't match any other line. It looks like all caps, if we make it a "fill-in-the-blanks", it really looks like "____LE: "
I don't think it's a stretch to say that was "BUBBLE" giving his opinion on that line.
Following that assumption, here's everything I could recover from that last couple seconds in the CLI (except I didn't bother with trying to format the WACKYTIME_LOCKOUT progress bars), using # to show the characters that aren't at all visible.
$: System selecting SAFEST option for stability
$: Cancel automatic selection [Y/N]
kinger@circus:~$ Y
WACKYTIME_LOCKOUT: 50% loaded
$: Which backup do you want? [A/B/C]
kinger@circus:~$ C
$: NONE selected! Interpreted as: DELETE###############NONE!
$: Confirm deletion of current unstable##############
kinger@circus:~$ N
$: Negative response! Inverting to NEGATIVE per emergency protocols!
BUBBLE: DELETE THIS M***, HAHAHAhahahaaaaaaaa
kinger@circus:~$ N
WACKYTIME_LOCKOUT: 80%
$: IGNORED! Proceeding with ORIGINAL d###########
$: Actually you're CONFUSED let me HELP #####nt module to EXIST? [Y/N]
kinger@circus:~$ Y
$: override instruction error falling back to default metric
kinger@circus:~$ ./Switcheroo_realti### --daemon --target torment_injection &
$: fusion --b####program1 program2 --####on
$: Are you sure you want to delete caine? [Y/N]
WACKYTIME_LOCKOUT: 90% loaded
kinger@circus:~$ Y
kinger@circus:~$./|ABORT Rollback --depth=1 --force --protocol G WVJI
kinger@circus:~$ ^C
DESTRUCTIVE WACKYTIME Lockout Load Sequence: COMPLETE
As @bluewarbler outlined, this paints a pretty clear picture that Kinger is trying to load a backup from before Caine went crazy, the system is willfully misinterpreting Kinger's commands and trying to trick him into deleting Caine, Bubble seems to have some degree of influence over the terminal, and when Kinger is finally tricked into confirming the deletion, he thinks quickly and makes a few different attempts to halt the deletion, albeit unsuccessfully.