Wait, I got it. Heavy Spoilers ahead:
For the letter positioning, put the "center screen dot" in the option menu ON, it helps a lot when inserting the letters, just point with the dot where the letter should go, don't use the letter shadow as a reference, it's misleading.
First off, trigger the first baby laugh, then it's letter chasing.
We got the C part, just take the letter, flip it in the mirror and insert it.
Then the J, take the J and place it AFTER the A, on the left. Basically, now you got the C, A and J.
it's Jack spelled backwards (hinted by the backwards messages during the last loop), so where to find the supposed K?
That's the A after the stairs, where in reality it's not an A but a K, you have to collect the letter sideways, when it looks like a K. If you take it the wrong way just flip it and put it next to the C.
Flashlight flickers, third laugh. Stay still until the phone rings. Answer the phone zooming on it.
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