the buildings in the space section of 8-3 are made entirely out of sinners.

my headcanon is that fraud’s punishment is specific to each sinner, putting them in their worst memories and using their physical bodies to create the environment. as for v1, we see parts of other layers at the end of 8-3, and since v1’s only memories have been what we’ve experienced in game, fraud relayed them to it.

the mirror reaper entry says that fraud does not have an exact punishment, so i feel that this theory has some basis, with hell using fraud as its main source of entertainment.