I have a theory about this alternate universe and it is this: Karen McPhee is the bridge between our universe and universe of "SMASH." When Uma Thurman caused her to have a catatonic psychotic break at the We Don't Use Peanuts Indian Restaurant, in last week's episode, it was at that moment that she became aware that she is a character on the TV show called "Smash."
It's sort of like "The Truman Show," except Karen is now aware that she is not only herself, but a fictional character. It's not reality TV, like in Truman Show, but a scripted character realizing that's what she is. The hint the creative team gave us was populating the Bollywood number with actors/characters from the show that her character has never met. But McPhee has definitely met them, because she works with them at the same studio. So now she knows that the cameras are watching her, which even though she is fictional and scripted, can not help but influence her character's behavior. As Margaret Mead proved, the presence of an observer changes the activities of the observed. Look for sideways glances in the direction of the camera, and try to notice if Karen lets the other characters know they are all characters, or if she keeps the revelation to herself.
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