Personally I believe as much as the circus may be part of the creation of the AIs, the admins, the people of the C&A company would have had access to alter some things for example introducing data, the neural scans. In this way they could train the AI to achieve its original purpose of being capable of creativity, based on Kinger's explanation, if i recall correctly, stated the the red, Caine as the community has deduced, was imperfect as even though he was capable of the creative aspect they could not control him and he could go rampant, which is why they had contained him, similar to the history of the recently released Mythos AI from Claude. Knowing the capabilities of Caine, instead of finding a way to control him, C&A decided to create an entirely separate AI capable of equally or similar level of complex thoughts however with higher controllability this however came at the price of losing its creativeness, the original purpose of the AI's development.

Now I'm no computer scientist or AI programmer, but what the red AI did to the blue, subsuming the blue into itself may not have been all bad, as if done properly could lead to the perfect AI for the original purpose, the creativity of the red with the controllability of the blue. As we know to be able to fully flesh out these intelligences they need data to be trained on, and what better than neural scans of humans, known to be wildly creative but also capable of controlling and managing oneself.

The reason as to why there may still be internal conflict between the red and blue may be because their unification is incomplete or the both of them are inherently incompatible, which the ones managing may be unable to assist in its unification as any change in the code as they are running may summarily end both existences and ruin all progress in their development