Chris' being arrested for incest doesn't ruin Chris' story. I think it cements his story as an unusually dramatically cogent real-life tragedy about the relationship between capitalism, entertainment, and what it means to live a mature, fulfilling life.
The tragic character begins with a sympathetic wound. So, we have the incident of the abusive babysitter locking him alone in a room full of toys, and Sarah locking him in the crawl space after telling him Casper the Friendly Ghost was there.
The initial wound sets up the conditions for the tragic character to make his first missteps down the path that will lead to his downfall. He changes his name to 'Christian' after the Leonard Bearstein animatronic mispronounced it, and wins $1000 worth of Sega for memorising Sonic Sez.
The initially good results of the missteps lead the tragic character to form faulty beliefs. Chris internalised from both of these events that fictional characters - toys, mascots, Casper the Friendly Ghost - and the companies that profit from them actually care about him, and should be listened to, appealed to, and relied upon more than actual people.
The tragic character's faulty beliefs then lead to habits which reinforce those beliefs. Chris enters many more competitions which involve playing a fictional role in a fictional world set up by entertainment companies (Animal Crossing, Parappa, Adult Swim.)
Maybe Chris could have changed around this time if someone had told him very literally what gaming and toy companies and paid gal pals will never tell men: which is that Sonic, Pikachu, anime, porn, etc. are just hyperreal stimuli laid out like bait by capital in order to manipulate human emotions and behaviour in a way that provides a return on capital. Instead, he was told by commercials that playing Sonic video games, collecting Pokemon, and playing Yu-Gi-oh could make you cool, popular, and powerful.
The habits build up to some kind of point of no return for the tragic character, which locks in place the events that will lead to their downfall. I think, in Chris' case, creating the Medallion was this sort of moment; like Walt in Breaking Bad putting on his hat and glasses. It was THE thing that visibly separated him from other people - even other autistics - and it separated him on the basis of his immersion in the world as it exists in commercials and consumer entertainment.
I think that Chris latched on to the 'Dimensional Merge' because it symbolises the desire for a resolution to the conflict between continuing to live in autistic Neverland and becoming a 'real boy'.
I also think Chris knew that his incest confession would be leaked.
Maybe Chris even knows on some level that fucking Barb was a symbolic 'return to the womb'? Or that fucking Barb would ironically cause a kind of replay of the incident of being locked in a dark room (prison) by a babysitter (the state of Virginia)?
The key difference between the room he was locked in as a child and prison is that he won't necessarily be alone in prison, and that there are no toys in prison.
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