The Lab:yrinth is a splinter group of DDD. It formed while still in DDD base, secretly using the technology and discoveries for their own projects. They stayed hidden for a long time until Kai Andrus outed them. After this, they dispersed but soon reformed in the UK. They built an underground maze on Rum and a couple of wards on the mainland, mirroring the simulation world they had built for testing.
They perfected their memory wiping techniques, known as resetting, while the maze and the wards were being built. They claimed they wanted to see what happens to the brain and person when they first shift to dragon form.
It was hard to find people who were willing, so they took young orphaned dragonbloods and raised them within the ward. Of course, dragonbloods can only shift for the first time once, so this is where the resetting came in.
By wiping the subject's memory before the next full moon, they can observe the reaction to shifting for the first time multiple times over the course of years. They soon brought in werewolves and shapeshifters for this too.
The simulation of the maze, where they tested how dragonbloods reacted under controlled situations had proved to be a success, but it had some major problems. When the dragonbloods shifted within the simulation, they also tended to shift in the real world. They also quickly figured out the simulation wasn't real due to glitches. This is where the maze they had built came in. They brought in dragonbloods of any age, reset them then sent them into the maze. In there are rooms which are designed to mess with them, both physically and psychologically.
The reset, thankfully, is temporary and they do regain their memories.