Continuity mistake: At the start of the episode, it is clear that the capsule fully rotates and the "contents: 2" sign is not on the capsule. (00:01:05)
Continuity mistake: At the start of the episode when we first see the polymorph, it looks into the mirror, then covers its eyes. Yet when we see the reflection, it already has its hands over its eyes before it gets to the mirror. (00:01:30)
Continuity mistake: Kryten removes the polymorph underpants and throws them under the covers of Lister's bed. When he checks the bed and pulls out a snake the pants are now on top of the covers (even though he says they're gone) and the covers themselves are now arranged differently. (00:10:00)
Continuity mistake: When the group are about to open the door with the heat seeking missiles inside and the Polymorph sneaks up behind them, Lister is standing at the front of the group, Cat and Kryten are behind Lister and Rimmer is standing at the back, behind all three. In the next shot, as the missiles exit the door, Rimmer is now suddenly standing front of Cat. (00:24:40)
Continuity mistake: When the Polymorph is switching between various appearances at the start, it stops at a rabbit. When the Polymorph stops at the rabbit, there is a damp stain beside the two yellow lines on the floor. This damp stain was not there when the Polymorph was switching between other forms. The stain just suddenly appears out of nowhere. (00:01:45)
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.