I think it has something to do with the cities. We saw an extended view a ways back, can't remember the chapter, where the neighboring areas all looked the same. I think the idea is that it's a model where there are the exact same elements placed to observe what happens across the board. However breaking the 'rules' could cause issues. I think something happened that caused her death, and I believe it had something to do with her relationship with Kudou.
I go with death because in the previous chapter the 'serpent' described her crows feet as something that have always existed, implying that she was created with them.
The same character goes on to state that he wants her to be alive, and to keep breathing.
Sort of odd to suggest those two lines if all that happened was that her memory was erased. It seems to me that an incident occurred that caused the observers to intervene.
Which could only be explained through breaking the rules, or if some horrible accident occurred.
To reinforce this being a lab sort of setting, I'd like to point out how they claim the city is 'unchanging', and how no one seems to ever leave, a manufactured environment.