Well done on creating all of the graphics, in particular the anti-reality glow effect. I think you guys took on a massive challenging creating a 3D game from scratch in a week, and with such a unique concept too. It was very rewarding to learn more about how the strange tools work, and to unravel the purpose of the game. The short time is great- it allows the player to fail fast, and focus on learning the systems, so that really works well. The ammo count signals very well that the player will need to use each item only once, and needs to figure out how.
If you work on this after the jam, definitely look into Cinemachine - I think it would make your life a lot easier. And I think for combat you could focus on the concept of telegraphing - maybe give players plenty of warning before and attack to dodge, and a very obvious attack radius to look at, so that it feels fair if the player stays within that area and gets hit.
Overall though, there's a lot of hard work covered in such a short game. Very impressive.