adding to this, i also want to mention that i think the reveal that the circus was a "creative AI project" was Gooseworx's attempt at subverting expectations, but it failed spectacularly.
i think the original idea was to make it a videogame for kids. that explains the censoring and inability to use profanity, it explains the zany circus setting, it explains why Caine himself is very childish because he was programmed that way, it explains the adventures, the NPCs, the theme song, why random people were able to enter this place through just a computer and a pair of headphones, etc.
but then people started predicting this, and maybe the team thought that the plot twist wouldn't hit if everyone already predicted what was going to happen.
here's the thing though: a predictable twist is always better than a twist that comes out of nowhere. if your audience can predict the big twist, that's a good thing because it means you're writing the story well enough for them to follow.
i remember Steven Universe got clowned on because the Pink Diamond twist was "too predictable". already i don't think that was true because it was just ONE person who predicted that twist. and even if it was predictable, it doesn't matter because the twist lines up with the rest of the story. it makes sense for the plot as a whole.
but not every writer sticks to their plans when they find out that people have predicted the twist. instead, they scrap the original idea and try to create another twist, but end up ruining their own story for the sake of shock value.
probably the biggest example of this is Game of Thrones, where everyone was so upset by the finale, because it completely shits on every character's arc just for the sake of shocking the audience. (i haven't actually watched GoT so this is all just me regurgitating online discourse)
and this is all speculation but i fear that's what Gooseworx has done too. it makes no sense to reveal that the circus was an AI project of a man who had a brain tumor and wanted to transfer his consciousness into a... kid's game-esque circus where they can't cuss or use profanity? and they're sent on adventures everyday where they get tortured? why??
even if the "scary adventures" was solely Caine's creation, i don't really see the point of Scratch wanting to spend the rest of his life in a digital world where the only thing he can do is be a wacky circus character and play games. why wouldn't he broaden the horizon? also why did he program it so that people in this world can feel pain? wasn't the whole point to escape a painful and torturous illness?
and it's fine if we got an answer to any of this. maybe circuses were Scratch's special interest. maybe he was a devout catholic and that's why he didn't want anyone to cuss in this world. but we'll never know any of that because the show doesn't bother to explain.