Predictive coding offers a powerful framework for cortical computation, yet scalable implementations that respect both Bayesian exactness and neurobiological constraints remain scarce. We bridge this gap by formally connecting predictive coding to Recursive Gaussian Processes (RGPs). RGPs employ a single Gaussian process \( g(t, \cdot) \) indexed by layer index and input value, preventing the representational collapse of standard deep Gaussian processes while allowing learnable cross-layer dependence via \( r_{1g} \). We demonstrate that RGPs intrinsically implement hierarchical Bayesian inference, uncertainty propagation, and precision-weighted prediction error. Critically, we map RGP components---the shared GP, spike-and-slab variable selection, and MCMC dynamics---onto the canonical cortical microcircuit, providing a neurobiological substrate for these computations. Drawing on the free energy principle, we show that RGP inference minimizes variational free energy, formally linking Bayesian mechanics to neuronal dynamics. Our synthesis positions RGPs as both a principled computational tool and a candidate model for the brain's predictive machinery, generating testable predictions for laminar-specific dynamics and spectral asymmetries between feedforward and feedback processing.
Under the free energy principle, a predictive system does not observe reality directly; it maintains a generative model of the world and experiences that model's best current hypothesis. Can a synthetic environment be made consistent enough that a predictive system's own inference machinery adopts it as this default hypothesis, permanently displacing the environment that first shaped it? We call this state ontological inversion. Because inducing and monitoring such a transition in a nervous system is neither ethical nor technically feasible, we study the underlying computational problem through a controlled proxy: a convolutional variational autoencoder paired with a recurrent latent predictor, whose evidence lower bound objective is mathematically identical, up to sign, to variational free energy itself. The network is trained first on a baseline visual domain, then on a mixed stream in which a swept rehearsal ratio r controls how much baseline content persists during transition to a target domain. Representational capacity, what the latent space can discriminate, is tracked separately from default behavior, what the system generates when left unconstrained. Across a full sweep of 90 runs, the two diverge sharply: representational accuracy stays near ceiling, 0.97 to 0.998, regardless of r, while default behavior spans nearly the system's entire range depending on r alone, a decoupling of learning from acceptance. More strikingly, at intermediate r the system's default output rises toward the target domain, then partially reverts toward the baseline while training continues unchanged, a structural failure we term cognitive relapse. Resistance to reality-adoption is not reducible to learning speed; it is a structural property with its own distinct failure modes, established here as a computational existence proof and nothing further.