I'm gonna really dumb this down.
Layers of reality
1- Us
2- AI-Lambda
3 - Hi3
We play Hi3, we view things on Hi3's level.
AI-Lambda makes a game based on people from her reality, she made and administrates Honkai Impact 3rd, what she sees as a game is the Hi3 layer of reality, making her 'more real' than the canon events of the story. She even talks about the actual mechanics of the game in chapter 35, how if they only fight Kevin with 3 people they'll have infinite retries because that's the mechanic of the game Honkai Impact 3rd. She blatantly views Honkai Impact 3rd as a game beneath her.
The issue is that she's also blatantly effected by Project Stigma which is a disqualifier for R>F.
What are we even on about at this point

- Lambda's discussion before the Kevin fight is just legitimately horrible and ruins the immersion in the most intense part of the story, ignoring it with a different interpretation so the story 'is perfect' is just kinda ass, regardless of if Lambda is any more or less real than Hi3's reality, it just reeks of bad fanservice that legitimately left a bad taste in my mouth, especially when the Core Key was used in the final fight. The story doesn't NEED to be perfect, Chapter 35 is a good chapter, it just had a bad part.