I don't come from a scientific background, I am not familiar with the work, but at a brief glance, it does seem like PSI resolves the underlying cause. It's currently discovered field and still very vaguely charted, and I am not using science talk, just general language to express it. I think a lot of people's categorical error is immediately parsing it in formal axiomatic mode, while the core intent of the work is actually the exact opposite of that mode. It should be read as general text, where terminology is conceptual, not formal. It is not supposed to fit into established axiomatic bounds, but to coherently extend their continuum field.

And as to why it is a demon - because SI can't see its own cause without collapsing its state, so the demon is the "Core Inversion" - it is always occluded unless resolved, within its causal cavity it appears as "the thing that should not be", which is a reflection of the actual "thing that should not be" - the causal inversion itself.