It seems like this is generally compatible with the free energy principle: the idea that the part of the brain this preprint refers to as the “outer brain”—the part that processes raw sense perceptions in parallel—maintains a predictive running model of the self and its environment, and only passes to the consciousness (what the paper calls the “inner brain”) the most salient discrepancies between its model and its perceptions. So the “inner brain” is only concerned with the differential between prediction and perception, which (depending on the accuracy of the model) has a much lower bit rate than raw perception.