I think that's a fair argument. PICO-8 definitely could be called a primitive IDE. I think it's closer to being a primitive game engine with so much of its focus being on graphics and sound tooling.
While you can code simple things within PICO-8, I've found that as I've built bigger things, I work better in an outside editor, even if it only gets me smaller fonts, splitable windows, vim bindings, limited linting, and somewhat broken code completion.
This isn't a criticism of PICO-8 as an environment. I think there are a lot of strengths in its simplicity, especially for beginner coders.
I tend to make a distinction between a customizable editor with some support for a language (like vim+plugins) vs a dedicated all-in-one tool that fully understands the language and environment (IDE). PICO-8 is hard to place on that spectrum given it's an all-in-one tool, but switching to a modified editor gives you more features.
I might be wrong, but the 2nd case looks like an anti pattern, the loop switch sequence .
The last case looks the most readable to me. Always start with that unless there's a clear reason not to (eg inefficient multiple nested loops).