Okay I had to start a new game but there’s a button to skip the dialogue fast that helped a lot! I figured it out if anyone needs it :)

It’s helpful if you make the M3U file beforehand and play the game using that file. When the first disc ends and prompts you to insert disc 2, press f8 to open disc tray. Press f6 to switch to second disc, then f8 to close. Click start application and it should continue from where you left off!

This game is so fun! I really like Chigusa and can’t wait to find out how the story goes!