Loraine represented the devil.
Everybody knows that satan is a tranny
I was thinking the EXACT SAME THING. I think this episode and the WOODS episode are linked in that both speaks on the transformation of Paperboi. With the WOODS, Paperboi was apprehensive in accepting himself as a rap star and it went through those woods and a transformation occurred where he was ready to accept and embrace the rap moniker. Wiley posed as an angel guiding him through the wilderness.
Prior to this episode, during this season, it was hinted at Paperboi not loving his rap career despite the success he been getting from it. He's been uninspired to write, the rap groupies fighting, he and Earn are more rapper & manager than cousin to cousin in these days and when Paperboi tried to get a simple CASUAL conversation with Earn, Earn is too manager focused to really engage. There were signs that Paperboi is being depressed. Like the end of the CANCER ATTACK episode after accepting his phone was forever lost (we know Socks stole it and tossed it), the last scene of that episode panned on Paperboi and him appearing depressed. So, whenever someone is in space where they're down and in doubt, THAT'S WHERE THE DEVIL enters and conflate everything. Loraine is definitely the DEVIL, first using that NAME in particular which was his mother's name that subconsciously gravitated towards. The devil's tactic ALWAYS is to BEFRIEND the vulnerable person, and that's what happened here. Claiming Paperboi needed to be "saved". Throwing doubt about EVERYTHING. Leading him into places like the Cancel Club, making him wear the GOOFY HAT which he's no different from those other GOOFY'S, engaging into Alfred's biggest FEARS.
Alfred is going to quit the rap game. I can see where this is going.