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I am twenty minutes into this game and I can honestly say I am shocked to say the least. I was able to keep a straight face for the first four rules, but that fifth one's punishment is unbelievable. The very premise of the punishment is revolting to me, to steal someone's memories is too cruel for me. Memories and experience is the foundation that makes you who and even losing a part of your memory changes you. 

This is in no way me saying I hate the game, just this particular part and I hope if there is any scenes in the game like this they can be avoided.

I hope you do enjoy the rest of your experience playing and trying the game, find moments you enjoy very much. ^^ With that said, I won't spoil anything regarding your shocked concern about the rule in question. I think the best I can say without ruining anything, is that there shouldn't be much of a worry regarding this rule, as it's meant to be the most extreme form of punishment for the worst contenders. (Light spoiler for ep 1: If asking John further about rules, he briefly mentions in the past. The academy has only had to make use of that rule once before. Off screen/out of game.)

Take that information as you will, of course.