The developers (a two-person team known only as “Sweater & Skeleton”) responded in the Final Chapter patch notes:

Rock-Paper-Scissors (RPS) is a well-known hand game usually played between two people, where each player simultaneously forms one of three shapes with an outstretched hand:

: Each victory progresses the strip-mechanic bar, while losing risks a game over. Gameplay Mechanics and Controls

The true “Final Chapter” is a 404 page. Dataminers found unused audio of a ghost laughing and saying, “Did you really think we programmed an ending? Take off your pants and laugh.” This has not been debunked.