You obviously know more about the science and math here than I do. So I'm offering these thoughts deferentially. I'm coming at this as a jack of all trades type who did a ton of philosophy of mind and cognitive science stuff in college but somewhat deficient with the hard science.
"What priors are being modeled"
I think this is the most interesting thing. There is so much information about how memories are recreated as you remember them, and about memory being unreliable. Even if you had an answer to the question "what priors are being modeled?", it would need to be indexed to a time. Indexing your question to times is where it gets interesting.
This would create a question that would be a lot harder and necessary to understand to get at the truth of this. Something like "How can the constantly changing sea of fragmented memories we base our idea of self on serve as reliable priors at all." Or, less poetically and more formally:
Given a person, P, at 2 times, T1 and T2, and two sets of priors, M1 and M2, such that M1 and M2 belong to P, at T1 and T2, respectively, and between T1 and T2, P obtained exactly one datum, D, what is the relationship between M1 at T1 in P, and (M2-D) at T2 in P?
And, generally, what calculus explains the relationship between Mx at Tx in P, and (My-Dn) at Ty in P, where Dn is the sum of the data P acquired between Tx and Ty?
I don't think M1 is equivalent to M2-D in the first, and I don't think that My-Dn is equivalent to Mx in the second. I think all the evidence about memories being inconsistent, recreated, count towards my intuition. I also think the way things like a sudden smell can cause priming of memories, or an emotional state can alter memory recall suggest this.
"how is inference implemented with neurons"
This seems like the most trivial, least profound, and most uninteresting part. We know that the brain does these inferences, and we know that even very simple systems based on cellular automation can be turing complete and make inferences. The particular details will not shed light on the fundamental problems understanding mind.
"what constraints, or "hyperparameters" are built into these priors."
It sounds to me like their idea that hallucinations and delusions as breakdowns of Bayesian statistics functionality would bear fruit that could answer this question, although I don't have an answer.
I also wonder, wasn't "the brain is ruled by electricity" a profound insight for it's time?