S4: Ep.36 Cloe has evidently simply disappeared. Ved cannot find her, and neither can the Mallrats. In Ep.35 she got herself scanned in preparation for playing the "Game". Meanwhile we see Ram morphing a picture of Cloe into one of May. It is May who finds the "Magic Key" in the first Reality Space Game. Mouse and Sammy watched the action and want to join in.

Mouse I wish we could play
Sammy We can, we've just gotta get scanned
Mouse Maybe we should wait for Cloe to get back. I wonder what's keeping her so long.

Ved Once you're in the Game, can you keep an eye out for Cloe?
Sammy Where do you think she'll be?
Ved Where do you think she'll be? In the Game of course!

Ved Scanner control— what's the word on the intensity encoders?..... OK. Give me an extra 10% on rematerialization. And move on it!
So what's this about rematerialization? It's a hint that once you're in the Game, your body has dematerialized somehow and might even get stuck. Hence the need for rematerialization.
This is all nonsense of course. The problem was that Cloud9 had to fire Cloe after she and Ved bunked off for the day when they were supposed to be on-set. Yes, their on-screen relationship had become off-screen, and this was a total no-no. Ved would be fired soon after. But all this about rematerialization, and getting stuck in cyberspace is science fantasy gone mad. Is this the best the script writers could come up with? Apparently so.