The author is being slightly inconsistent, with respect to the other premises of the story, in saying there is a feedback loop: as it is set up, simulations have no causal power in the world running them.
If the top-level 'God' people choose to run the simulation faster than real-time, I think we can say that no change will be observable anywhere in the simulation stack, except that the people in them will feel as though they have chosen to speed up their simulation and yet not seen any change in it - which is another of the things that will tell that they are in a simulation and not at the top level. (Note that, as Diane has presumably already said in her paper, free will is definitely an illusion in the simulations. I guess it also is at the top-level, given that their universe is deterministic to the point that it can be simulated to the tiniest detail.)
Now suppose the top-level people choose to run the simulation in reverse. Again, I think we can say that nothing will seem to change to those in any simulation, because, at any point in the reversal, everything, and in particular everyone, will be in the same state as they were in the forward pass, which for the people includes having the same memories, plans and expectations - it will be indistinguisable from an instant in forward-running time. They won't even remember that, at some point, the clock was reversed, as that was not something in the forward simulation's past.
This is where it starts to get interesting: if the clock is reversed again and left to run, what will be observed in the simulations, and by the top-level people looking at the first-level simulation, when the simulations reach the time of the original reversal?
Update: I'm leaning towards the view that the top-level simulation continues forward in time from this point, and observes its simulation go around the loop. In general, the Nth simulation goes round the loop N times before proceeding past the reversal point, but no simulation observes that it is going or has gone around the loop, and therefore cannot determine its depth by counting loops.
Alternatively...
The moment the 'camera' appears in a simulation, it has diverged from the 'real' world. Now some of its inhabitants know they are in a simulation, and so they are not replicating what happens in the real world. The butterfly effect will likely ensure that the divergence will become general. I think this could be undone by sending the simulations around a time loop, as then, if my supposition about how these loops play out is correct, each simulation will exit the loop in the same state as the real world, with no memory of the camera having once appeared.