The sequence begins with a Durante caricature with his nose protruding downward at a specific angle. It comes at a reel change, so it is extended by Durante's laugh over the image. Now think how Keaton was positioned in the shot immediately preceding this one. I think a fade in/out transition was chosen instead of a lap dissolve for a reason.
Of course it leads to a possible compromising situation, and the troupe has now learned the truth behind the professor's inheritance, so it's time for a nice switcheroo. And a few trims, because by now everyone was on a roll.
Appendix - here are the screen shots of the end of sequence 7 and the start of sequence 8, with a simulated midpoint of a slow lap dissolve of the two, had the transition been performed in that manner -