That sounds like good stuff.
The tropes are Planescape-y (a once-fallen deva, the River Styx, a memory-restoring flower, etc) but I'm not seeing anything here about obective vs subjective value as a key element of setting or of play. To me it just looks like good old-fashioned roleplaying: the players had goals and commitments for their PCs, the GM put these into (prima facie) conflict, and the players dealt with that conflict, in this case by coming up with an all-round satisfactory outcome.
Whether the PCs did the right thing or not is not something that the setting and other ingame material gives an answer to - it's a matter of audience judgement, just as for any other fiction.
Yes, it was definitely good old fashioned role-playing.
Perhaps the "power of belief" was subtle in my example and not readily evident, but what distinguished my example from my other non-Planescape experiences with D&D was that the players were making decisions about the nature of reality (in this case, about the nature of memory). For example, one of the questions hidden within the conflict was "Given the same set of traumatic memories, will the same person always respond the same way twice?" To answer that question was to assert a truth about the nature of memory, choice, and self. In the case of my players, given their actions with resolving the deva dilemma, their implied answer was something like: "It depends on the severity of the traumatic memory. We can respond differently to less severe memories, but the ones of utmost severity doom us to a single response we cannot alter."
That then became a truth to the "multiverse state" in my game.
I don't see the shaping of truth through the power of belief. This could in part because I don't know how the actions were resolved, and hence success achieved.
Eg if, once the players have reached a mutually satisfactory settlement, did the GM just "say yes"? For me, that would be something that takes place at the metagame level - the interesting play material in the situation has been dealt with, so now we narrate the scene closed and move onto the next interesting thing. But maybe the GM "saying yes" is seen as corresponding to some actual even/causal power within the setting?
The faction-derived powers also seem to have been relevant, but that would seem to be belief leading to truth only in an instrumental sense: conviction leads to faction-derived powers, and those powers then allow doing stuff, and so in that instrumental fashion belief shaped truth - but that is really no different from any conviction-derived powers (eg a cleric's spells in standard D&D).
Maybe there's something else that I'm missing here?
Ah, you're looking for the specific mechanism by which "power of belief" moved beyond being instrumental to being...more direct?
In looking at my Planescape game in retrospect, I tended to follow a progression of the PCs' beliefs having an instrumental effect at first, then developing to more direct causality over time, until the world state was evidenced as changed because of the PCs' beliefs.
In my example of play, the PCs made some conclusions about the nature of memory and self that later were reflected back at them. They decided that the same person would always react the same way to severe enough an experience...but what defines a "same person"? Since both PCs were Sensates, they tended to believe more in experience over innate nature in defining a person. So, if the same person had a different life experience then they might respond differently to the same severe trauma.
I came up with a group of Sensate mystics who offered sensory stones (magical stones used to record experiences) that could overwrite one's own memories in a ritual. A lot like Total Recall. Of course, others with less pure motives got involved seeing it as a method for control & brainwashing, but there were also those suffering from troubled memories who benefited. The PCs decided that the experiences were illusory and shut down the mystics.
To further test/reflect their belief, I introduced an NPC who existed in three reincarnated forms, each the same core identity/personality, yet with different life experiences. All three versions of the NPC loved the same erinyes (one hoped to redeem her with his love, another willingly went to the hellfire for her, and the last loved her despite knowing she was irredeemably evil and not trusting her). The PCs were in conflict with the erinyes and ended up killing her, turning the three versions of the NPC against them (possibly charm magic was involved, can't remember exactly). However, the PCs argued with the NPC for their belief that the different life experiences of the three versions allowed them to respond differently. As a result of that belief (which the PCs had proven themselves believing in), two versions of the NPC relented and sough peace, though one version persisted in fighting and was destroyed by the PCs.
Later on, they found Sensates (as well as other NPCs they'd crossed paths with) seeking out specific experiences to deliberately change their response to past traumas. Advances were made in treatment of the mentally ill, the Sensates becoming the R&D side of e Bleak Cabal who ran the asylum (which became much more humane). A group of celestials used the PCs as an example to redeem fiends (and that fiends *could* be redeemed became an extension of the PCs' beliefs). And the Mage PC had some dramatic roleplaying about turning away from her dark side, thanks to her belief in the power of her experiences.
The power of belief may not have been directly obvious in the sense of "I imagine a spoon! *POOF* A spoon!" But my players and I definitely felt the world state had changed as a result of their PCs' beliefs, and in more than just an instrumental sense.
