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Hopefully this is obvious to anyone else that buys this guy, but before anyone else pulls their hair out trying to figure out why one side of the torso mode won't tab in properly, there's actually a front and back side to the midsection. The side with the armatures is the front and the panels can tab together with the grey front side out, while the other side's panels can only tab together properly with the orange sides out. Kaen is completely symmetrical otherwise so this was easy to miss at first.
This is actually shown on the instructions but they're awful and I could barely tell.