So rereading Chapter 1, the only way any of this makes sense is if Shun is just braindead and lost his memories. We see from Kyou's perspective how he thinks and the things he's done. Kyou literally says he wants to kill someone and cause them so much despair they kill themselves while talking to the initial group of asshole kids and Shun is not there. It was a conversation that only us the audience was privy to. We also see Kyou himself pick up a rock and beat Shun's little brother in the head to put him in a coma which again Shun wasn't there for so it was only shown for us the audience. Any sort of "well maybe Kyou wasn't actually bad and Shun just misremembered" is rendered null due to those scenes unless the author just straight up lied to us.
Also leading from that, the part where Kyou beats Kakeru into a coma was preceded by a phone call to Shun where he brags about his plan to murder his family which means the phone call is real to due to continuity. The only way Shun would take Kyou for his word is if Shun forgot which to be fair, they did have that dumbass memory loss arc so its possible he only remembered some things but that's such a lazy cop out. Point being, I don't understand what all of this setup is for. The audience can go back and reference the early chapters and see that Kyou was never a good person or a friend. The argument that Shun was deluded doesn't work when they gave us scenes without Shun's involvement.
Also as a wild prediction I'm going to say that the "twist" of this VR simulation nonsense is that the "real" villain will be revealed to be Shun's grandpa. Chapter 1 also established that his gramps was not on good terms with his parents and his dad and mom freaked out when Shun was anywhere near him. This also seems at odds with the backstory we got from the grandfather's comrade considering his wife seemed pretty content with him and you'd think his son would be fine as well so something must have happened that caused his son to distance himself (also weird that the wife just kind of dies off screen with zero ceremony, Shun's dad never brings up his own mom/Shun's grandma). The pieces are in place to cast doubt on the grandpa but honestly there are too many incongruencies in the narrative now because the manga is obviously running on a different outline than it did when it first started.