spoiler
Doctor alchemist dad murders them both and combines them into a chimera, Its later revealed he did the same to his wife who “left” him.
People like to reference this because it was a well written horror short that threw everyone for a loop. Its both a form of traumabonding and way of messing with people who are in the know.
It is a good anime but Its been out for years and maybe if they keep seeing it referenced theyll get around to watching it. The episode in question is basically filler and doesnt provide much to the overarching story