Weird Technical Bug in Chaco's House

So at school, I showed my friend Cave Story, and he was playing through it with me guiding him at certain parts when something bizaare happened... What happened, is after he got the Jellyfish Juice in Grasstown, he went back into Chaco's house (without getting the charcoal/skipping via damage boost), and tried to interact with something, but for some reason, couldn't. We tested to see if it was possibly his down/interact key was being weird, but he could aim down in the air. (Meaning the game did recognize his down-input in the air, but not on ground.) Because of this, he had to restart and resume from his last save.
Weirdness aside, has anyone ever had this happen to them?
On an unrelated, yet possible note, we did mess around with Booster's Lab a tad, but that was only at the very beginning (pre-Polar Star), and that was creating an npc that gave you the fireball. (So when he reached Chaco the first time, he already had the fireball) However, I don't think that should have affected it as you normally visit Chaco after you got Fireball.
(I don't happen to know the specifications of the computers we were playing on, but I can hopefully find out and post it here if that helps anyone.)

 

So at school, I showed my friend Cave Story, and he was playing through it with me guiding him at certain parts when something bizaare happened... What happened, is after he got the Jellyfish Juice in Grasstown, he went back into Chaco's house (without getting the charcoal/skipping via damage boost), and tried to interact with something, but for some reason, couldn't.

this is one of the few glitches in the entire game. its game breaking and can be achieved in any vanilla cave story

 

Sometime when this happens to me, I can fix it by mashing down and jump. Does anyone know why this happens?

 

I've never seen this happen... If I could manage to reproduce it, I could probably figure out why though.

 

What your describing sounds like some sort of event was running, since you can't interact with anything during an event. I'm not quite sure what event could be activated in Chaco's House while still being able to move, but that seems to be your issue.