The Sea Wasp (Ryk E. Spoor)

>>The characters' main power of Persona is, in this game, manifested as the ability to enter the mental constructs, the "Palaces", of these people and, if successful, find their way to their center and break the twisted desires and beliefs that form the heart of each one. This is of course a terrible shock to the target, who generally will then break down <<

That actually does work -- and science has no way to treat reality tunnel injuries.

>> confess their crimes and accept punishment or seek to perform restitution.<<

I haven't seen that happen; usually they just crawl away and avoid the person.

>>Yet any player of these, and especially of Persona, must feel an awful and revolting echo in the real world from what was supposed to be a more escapist story,<<

I used to play Paranoia in high school. It was funny then. It is not funny now. Living in a dystopia, I've largely lost my taste for fictional ones. Though my readers did prompt me for what turned into postapocalyptic hopepunk.