As a Moments subpage, all spoilers are unmarked as per policy. You Have Been Warned.
- If you go with the Sword Art Online Abridged interpretation, this makes significantly more sense. Kayaba "accidentally creating a glitch that kills players when their AVATARS DIE!" might have merely been accidental triggering of the same code that caused Beefbrain/the Mindcrash. Both creators even "doubled, tripled, and quadrupled down" on their mistakes, by pushing an untested Outlaw build to production as a forced global install/locking the players in the game respectively.
- Additionally, just like not everyone logged in at the time was killed in the Mindcrash, not all killed-in-game SAO players actually died for real. The NerveGear just had a much higher bodycount (all killed players except two, three including Kayaba himself) due to being orders of magnitude more powerful than the Hypnospace.
Even if the two devices work in a nearly-identical fashion, the SomnaSculpt, being a therapy device, was meant to be used for a night or two at most, while the Hypnospace was intended for frequent, every-night usage. Perhaps the long-term side effects (being kept in REM sleep for far too long, laser damage to the brain, etc) were never discovered due to prior applications being a single-use ordeal...
The only thing we know about the gameplay is the focus on diplomacy. And given that the game has a Kid Hero, trying to engage in combat against alien soldiers directly would not end well, so they have to try to de-escalate the conflict instead.
As for how exactly it would work, we do have a real-world example of a diplomatic RPG: Undertale. Peace talks in that game are rarely ever straightforward, there's a strong puzzle element to them that a pacifist run can't be done without figuring out — and even when you do, you still have to avoid getting killed while pulling it off.
And given what we've seen from TheObserver's review page, with the Yolky attempting to go against the Hissslime not being a good idea, a puzzle element coming into play here is very likely. You have to have the right SquisherZ use the right tactics at the right time.