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Watch closely in the videos and you'll see that enemies often respawn when offscreen and sometimes when onscreen. Destroyed barrels come back, ammo count and health fluctuates weirdly, etc. It's still impressive, but its not perfect in that regard.

Not unlike in (human) dreams.

It doesn't even remember the state of the game you look at. Doors spawning right in front of you, particle effects turning into enemies mid flight etc, so just regular gen AI issues.

Edit: Can see this in the first 10 seconds of the first video under "Full Gameplay Videos", stairs turning to corridor turning to closed door for no reason without looking away.

There's also the case in the video (0:59) where the player jumps into the poison but doesn't take damage for a few seconds then takes two doses back-to-back - they should've taken a hit of damage every ~500-1000ms(?)

Guessing the model hasn't been taught enough about that, because most people don't jump into hazards.

It doesn't. You need to put the world state in the input (the "prompt", even it doesn't look like prompt in this case). Whatever not in the prompt is lost.