I agree that Reaper and Sunny appear to be reincarnations of the King and Queen.
I don't want to admit it's underrated, since it spawned two sequels, and got rave critics reviews, but it's sooooo underrated!! This episode went in circles: when he asks her to pull out the sword, she refuses; when she finally agrees, he pushes it to tomorrow's tomorrow's tomorrow.
My guess is that everyone's theories have been right and the Reaper and Sunny are actually the reincarnations of the king and queen.