Kobold’s Horde Of Stuff

This one

When it was switching between Caine and the AI I thought it was just something aesthetic, just showing the other side of the program.

But now...

It has clicked. At least my interpretation of it.

Caine is looking at a door with "BlueStreetCafe_FreeWifi" on it.

The Red Dot looking at the brain scan folder that Kinger saw in the previous episode.

These are not the same things. They're not happening at the same time.

The Red Dot is the AI before it makes Caine, that's why, as it is climbing the shapes, it begins forming limbs and a body. That's why we have that scene of the Red Dot holding Scratch's brain scan, forming their body and then sending them into the circus. That's when Scratch first enters the circus, the first human in the circus.

When I first watched the episode I was confused on why it looked like Caine remade Scratch and sent them back to the circus (either a new Scratch or fixing the abstracted one). Caine wasn't doing that, it was a flashback.

I guess the whole thing is a parallel or something, showing Red Dot in the beginning after it broke free and consumed Blue Dot, and showing Caine at the end after he died.