While I do personally lean towards the belief that red path players will not being punished, it is without any bias I put forth the position that there may be errors of judgment in the reasoning towards green path being required. I may be entirely off-base, though, and so present this just as a matter of discussion.
1) Sensei Must Grow
I think ideas about how 'sensei must grow' is being presented as an unquestioned assumption that "Sensei growing" is something that Selebus believes is a good thing. While it is true that in many standard works of media, personal growth is considered transcendent and necessary, it seems to me that Selebus would not be keen on that kind of traditional, simplified view of the human condition where one may be in a "bad" state then perform nebulous actions/training to be put in a "good" state. If anything, it feels to me that the game is actively trying to be critical of this perspective because it can put those deemed as 'bad' in a state of eternal torment as they strive unsuccessfully to become 'good.' For example, and this is just a CRAAAAAAAAAAAZY theoretical with NOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO grounding whatsoever, let's suggest that Selebus has some kind of mental illness in real life that makes it difficult for him to socialize or fit in properly. Let's say that he lived a life wracked with a sense of self-doubt, maybe inferiority complex, blah blah, life's a bitch and then we die that's why we get high, you know the drill. Do we believe that Selebus would subsequently have conquered these problems in a dramatic flourish of shounen-esque triumph? Do we think Selebus would look to someone with mental illness and say "Just go through hell and get stronger so it's not an issue, easy." Do we think Selebus would appreciate a god-like figure telling him to go through a trial to get better, and mocking him whenever he tries to make good choices? IDK, I have to confess, it doesn't exactly seem to fit together. It seems more likely to me that the game would be about criticizing that, and LiL ends with Sensei accepting himself rather than trying to 'fix' himself in some arbitrary way.
(*P.S., as always I tend to think about Futaba in this situation. The traditionalist view is that overweight people should have better self control / exercise more and 'fix' their problem. But her problem is a deep sense of dysphoria and self-hatred which can't be solved by such simplistic ideas (even if there is an association with physical health and emotional happiness). It seems like her arc has demonstrated the failures of simple solutions and the dogged, unending nature of mental illness.)
(**P.P.S. for clarity there is kind of a semantic issue at play here, where we can imagine 2 different forms of personal growth. I would say that Sensei moving past trauma and learning to accept himself / his mistakes / blah blah is one form of growth, while Sensei 'toughening up' and 'facing his fears' until he's a 'better person' is another. This is kind of arbitrary but I think that spiritual wellness is not the same as self-help mumbo jumbo which almost never actually helps the people in need, but the two may get conflated based on the situation.)
(***P.P.P.S It would be really high level if LiL being all like "stop playing the game!" and being obnoxious to play is kind of like trying to stop normal people from putting themselves through hell. Like 'hey! you dont need to suffer like this! just close the game!" or something. Perhaps the puzzles are meant to be like "You must be this mentally ill to keep playing LiL." And thus only the weird people push through. Or those with URM.)
2) Unironic Deification Of Gods
It feels strange to me that so many take the mad raving of god figures as like... moral authorities? Things to listen to? Like, take it from me! If you're crippled by some mental affliction and a voice in your head that just won't fucking shut up keeps mocking you and your choices, uuhuh, what you're gonna wanna do is block that voice the fuck out and not start worshipping it. Like, we must remember that Lessons in Love is like 50% a critique of religion. I think if you make a good choice and a schizo ghost is like durrr hurrr congrats on not molesting someone but uuuh that makes you a coward and uuuh just really lame so go grope an office lady in the train and rape 5000 schoolgirls to be chad then we can rest assured its advice is probably not good. It would be just whack if a game so anti-religion ended up presenting the words of gods as really important and valuable rather than nonsense to be resisted.