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Just panning the camera around, I noticed the cat sprite rotates so it's always oriented toward the camera, but the player sprite maintains a constant angle. Playing the demo is even weirder: WASD always moves relative to the current camera angle (e.g. if camera faces east, W moves east), but does not rotate the camera. Arrow keys also move relative to current camera but also move the camera, up and down for up and down, and rotating for left and right. Pressing left arrow repeatedly makes the PC move in roughly a circle. I don't know how much of this behavior is intentional, or how much is a result of being a first pass at the idea.

this is because cat drawing is set to use billboard mesh and avatar uses the plane. you can alt-click the drawing in the editor and select a different mesh type in 3d settings panel, under mesh tab
arrow keys rotating the camera is not intended behavior, it's on the todo list for getting fixed!

Ah, I hadn't noticed those were options. I tried the different types, and they seem to offer a wide set of options. The transform options allow for some effects not found in 2D Bitsy. I also found the camera type options and played with those.

I had just started typing a comment about transparency when I found the option for that as well.