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The bad egg is basically a trophy that indicates you found one of the game's secrets. There's a few others, and in the postgame there's an NPC who'll give you a reward for having them all.
I've experienced this bug too, I don't think it's tied to the item it's just a bug with that cutscene. If you walk her through her door, that's another way to fix it, you'll regain proper control inside the house.
Really cool hack! 👍
I know the discovery process is a major point of the hack, but for reference now that I (and hypothetically other players) have finished, would you be interested in releasing more complete documentation at all? With things like base stats and catch rates, for example. Some...