In case it was ever discovered and Gray needed to dispose of the evidence? Or perhaps it was to be used in the event of some mass revolt? Or maybe Gray planned on sacrificing himself and everyone inside once his experiment was done from the start?
In Episode 3, where did the bodies of Eddie and Cathy go after they died? We know that Danny disappeared from his floor because he turned out to be alive, but that doesn't explain how the other two vanished. Did Gray somehow dispose of their bodies before his first meeting with Rachel?
Do note that the players are playing from the perspective of a drugged Rachel at the time. For all we know, their bodies are there, just that Rachel doesn't register them as being there and instead hallucinated them being still very well alive. This could certainly explain the early puzzle parts of Episode 3 and the 'moving toy hands'/'prisoners walking around freely' later on. The only body that we know is confirmed gone is Danny because Rachel herself is back to normal at the time, and that has already been explained as him still being alive. Anything else that happened during the beginning and the end of Rachel's hallucination during both her and Gray's descent down the floors is unclear.
How did Rachel manage to take the knife with her to the rehab facility?
She probably didn't. Zack also has his scythe back so chances are broke into the evidence lockup and grabbed the knife for good measure. Getting Rachel out took priority so giving her the knife back fell by the wayside and they both just forgot about it. She wouldn't need it anymore anyway since she stayed alive until he got to her so it served its purpose.
That's wrong. She clearly has the knife in the final cutscene before Zack arrives.
