Dear Dr. Singh:
Thank you for your careful reading of my essay, and for your extensive comments.
With respect to Fig. 2B, you are correct that this represents many systems evolving in parallel, so that many directions of evolution are possible.
The question of how a conscious mind recognizes self and agency is indeed an important one. Minds are designed to recognize the continuity of objects even if they move or change, and further to identify correlations as causal. For example, if object A moves next to resting object B, which suddenly moves, then object A is an agent that caused (non-agent) object B to move. Neural networks are good at matching patterns like this.
With respect to how a virtual reality construction representing consciousness first evolves, that too is an important question. But consider the need of an animal to partition a visual field into objects of various categories: food, threats, mates, competitors. Some of these identifications may be instinctive, but others may be learned. The ability to make dynamic identifications based on past experiences would be highly adaptive. A dynamic model with active embedded links can start out simple, and become more complex with evolution.
With respect to my comments in the conclusion about illusions, my key point is that our subjective perceptions are NOT the same as the external reality. Instead, they represent a simplified construction, like a dream or a virtual reality, which dynamically tracks external reality and enables rapid adaptive responses. Only by looking past the illusions can we make genuine progress on understanding consciousness.
Alan Kadin