Audio problem: When Kryten starts looking over Lister's bunk trying to find the Polymorph, posing as the boxers, the boxers, and therefore the Polymorph, are visible on the bunk. The sound of the Polymorph transforming is heard, indicating the Polymorph has changed form, but the boxers remain there, without any transformation. It is not until a few shots after that the Polymorph has appeared to have changed form. (00:10:00)

Red Dwarf (1988)
2 audio problems in Polymorph - chronological order
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Suggested correction: Lister can only see M-Corp products and M-Corp employees. Cat is not an employee of JMC or M-Corp, so he disappears. Lister is the only member of the crew who is employed by M-Corp at this point.
Suggested correction: Cat was a descendant of the cat Lister brought aboard Red Dwarf. Would it be possible that the new owners might have stricter security controls, and Lister was sent to Stasis for a different reason?
Andy Benham ★
Inventing Deux ex machina explanations for a plot hole doesn't make it any less of a plot hole. M-Corp erases all of the Jupiter Mining Corporation's equipment, personnel and infrastructure from Lister's life. In no way is Cat a part of that. He has no connection at all to the Jupiter Mining Corporation, and until he meets him in Episode 1 no connection to Lister, either.
If M-Corp only erased JMC equipment from Lister's life, then Kryten, who belongs to DivaDroid and not the JMC, wouldn't have disappeared either. He disappears as he doesn't belong to M-Corp, not because he belongs to the JMC. Cat has no connection to M-Corp, as he wasn't a part of the JMC (as you pointed out), and is therefore erased for Lister.