Maybe DPC realised that the 3 branching paths would be too much work to keep going and they were just trying to patch them back together. Same thing with the divergent M&J paths because if you don't agree to the threesome in ep 4, they tell you they still have feelings for you and he feels the same way.
I think both flashbacks for Rusty founding the DIKs and for young Isabella did cost a lot of resources but they have no player decisions so those scenes are more like a film than a game and they do not progress mc's story. Without the flashbacks, the story probably would have made it at least to Monday and we would already know Rusty's fate.
I agree with your critique on the M&J paths. Setting the path in ep.4 with dependence on affinity was a bad design since both girls still have feelings for mc. I think there should always be 4 choices : none, Josy, Maya, Josy & Maya, e.g. when talking to Derek. I suppose the threesome was saved by purpose for next episode when mc helps with the scavenger hunt.
The 3 paths (Derek, Sage, Isabella) in episode 4 have some minor influence on episode 5 scenes. For example if mc stayed with Bella in ep.4, his guitar is there and he can play for Jill and Bella. I don't know if there are more variations for the 3 paths.