The Denial Subroutine was unwittingly created by Claptrap as a means to repress and safe-guard his memories of the Vault Hunter competition at Overlook. As the Vault Hunters begin to reenact and uncover the repressed memory, the Denial Subroutine makes its presence known by raising Gubbin's Shack out of reach to impede their progress. It also periodically attacks by using its tentacles.
After the Vault Hunters reenact Claptrap's memory and free the Override Key from the frozen memory, the Denial Subroutine grabs the key and attempts to flee, with the Vault Hunters in pursuit.