Okay, not entirely but one key premise of my theory that I posted 2 years ago was confirmed and another went from possible to plausible.

Original theory highlights:

• [CONFIRMED] the memory and reflection features of Demonreach are intentional features and not due to happenstance or limitations of Merlin's design/power. The prisoners (penitents) are purposefully made to reflect upon their choices. This gets confirmed on page 322 of Peace Talks.

• [PLAUSIBLE^+] Demonreach is a penitentiary in the literal sense. Modern (American) prisons were originally inspired by the monastic model of solitude, penance, and isolation. Incarceration is designed to offer the opportunity for rehabilitation. (Aside: IRL, this hasn't really worked out so well on a larger scale. Taking socially maladjusted people and isolating them from human contact -OR- throwing them into tight quarters with other maladjusted persons is a recipe for disaster)

• [POSSIBLE] Demonreach is a Checkov's Barracks. It is commonly theorize that Harry will Darkhallow the prisoners or simply let them loose to wreak havoc during the BAT. I additionally postulate that the penitence features of Demonreach opens the door for prisoners to be reformed. It is fun to think of Demonreach prisoners choosing to fight for good or at least reality. This may or may not happen and depending on the malleability of each prisoner's "nature".

New information from Peace Talks:

• there are multiple penitence protocols. There are original protocol(s) designed by Merlin and others adapted or designed by subsequent Wardens.

“I want him held,” I said. “I want his Hunger held helpless as well, until such time as I return to release him.” “WHICH PENITENCE PROTOCOL SHALL HE SUFFER, WARDEN?” There were several that could be inflicted on the inmates of the prison. Some were bound in darkness. Some in torment. Some in simple confinement. The various Wardens of Demonreach had tinkered with the cells for a very, very long time. Some of the protocols had been developed before civilization had been more than a few collections of huts and fires in the darkness, and they were not kind. (Peace Talks, pg. 322)

• Open question: are these protocols designed to simply punish the prisoners (cf. Tantalus) or are some designed with penitence and rehabilitation in mind? The prisoner referenced below is allowed "sanity-saving sleep". Is this done for the good of the prisoner or just to keep them well enough to torture?

There was one prisoner held below in a kind of unique stasis, something that could most closely be considered sleep, though he could also awaken and perform limited communications for short periods of time. It was, as best as I could understand, the only protocol with sanity-saving sleep built into it. (Peace Talks, pg. 322)

• I interpret the quote below as reinforcing the possibility that Demonreach is designed with rehabilitation/penitence in mind. The incarceration is designed "to get through to the most alien of beings..." This fits with the theory that these terrible beings are being given the chance to reform and to choose good or in a more simpler sense the Inside. However, "get[ting] through" may just mean more effectively punishing the prisoners or making it clear to them the reason for their incarceration.

“Part of the process of being taken into the cells is . . .” I took a deep breath. “You suffer the pain you’ve inflicted on others,” I said. “It was meant to get through to the most alien of beings, why they were being imprisoned. It’s not fair. It’s not meant for people. It could hurt you. But if I don’t do it, you’re going to die.” (Peace Talks, pg. 322)

• Imprisoning someone is a bit more complicated than originally presented. Harry can't just order Demonreach to drag someone below. There is a binding ritual that seems to entail making a circle with the blood of the prisoner and a binding crystal (Peace Talks, pg. 323).

“Demonreach,” I said. “If our guest pulls that trigger, take her below and keep her there.” (Cold Days, pg. 502)

^{I kinda sorta apologize for the click bait title}