@Phasmophobia said:

Just like in Part 2, Part 3 gives younger brother Ricky, who had no involvement in Billy's killings and was only a baby when the parents were murdered, memories of all of these events happening.

Part 2 actually gave an explanation, feeble as it was, that Billy told Ricky of the events of part 1 (when, who knows as it doesn't fit the tight timeline of the movie), and that was enough for him to continue in his footsteps. Which is weird cause seeing his brother killed in front him of him could have been it's own motivation. But I suppose it was enough to justify basically re-releasing part 1 with new footage as the wraparound story and calling it a sequel.

Here, though, yeah it makes no sense. Part 2 got away with it cause he was recounting a story second-hand. Fair enough. But in part 3, the psychic was seeing the events of part 1 which would have been impossible, Ricky would have no first-hand recollection of it.