"sprite layering mechanics are gonna be a pain in the butt to figure out." Well I'm a pain in the butt so maybe I could help. When inanimate objects are prototyped first, they are represented with a symbol. When animate or deceased creatures are prototyped first, they appear as themselves with a ghostly lack of legs, this also applies if they are prototyped second. With the X2 sprite combo it became complex enough for legs to appear. 1: symbol 2: ghost 3(maybe 4?): full body. Simply speculation.

This take on it does make some sense. Hopefully sprite mechanics will be revealed in more detail soon.