Pretty much - that was the big revelation that was never actually mentioned in game in 1.0 - it was only when Ferne mentioned it on the old forum that players found out about it - that for much of the first part of the game (their starting city), the player is pretty much just blundering around in Echo visions of other npcs' memories of events that happened ten years previously.

It seems the original Tanaka storyline was actually leading up to the revelation of that idea as a major plot point, but unfortunately it was never resolved.