Jo, Lucy and Camille walking slowly is a reference to The Jennifers.
After constant rejections, Lucy finally shows feelings towards James after he saves her from being pranked, hinting that they may become a couple in the future.
Technically from a perspective when Katie and Kendall blast each other with the confetti launchers, Katie shouldn't have been out as she blasted Kendall first. Then Kendall blasted her so Kendall was out before Katie. Meaning Katie was still in the game.
This was the second time they sang the Confetti Falling, The first time was Big Time Cameo.