Loop Hero’s narrative presents the looping world as a catastrophe — the lich Omega has erased reality and replaced it with an empty loop. The hero marches through regenerated terrain, building a world from memories, collecting resources, and eventually confronting Omega. The story is legible at this level.
The lich boss encounters, when defeated at high difficulty, drop Memories: item-type collectibles that are described in flavour text as recovered fragments of the world before Omega’s erasure. The Memories, collected in sequence, describe a world that was not uniformly good — a pre-loop history containing wars, famines, and political failures that the loop’s survivors have unconsciously edited out.
Four Star Games built a revisionist history layer into the looping world: the world people are trying to remember was not the paradise the quest implies. The hero is reconstructing a past that needs to be honestly understood, not simply recovered. The Memory collectibles are the honest version.
The game’s ending changes slightly based on how many Memories the player has collected — not in plot terms but in the hero’s final monologue, which acknowledges the complicated past for players who have assembled the full picture.

Found this by accident on my third run. Came here to understand what I was actually looking at. Great write-up.
Saved this article for my gaming reference folder. Essential reading for anyone serious about this game.