Why is the game set up as class Game: ? Why isn't game just a function that is called?

Your understanding seems correct. The Hack 'n' Slash section is in the Object Oriented Programming introduction so the thrust of all these code example will be how to solve this using classes. The game could clearly have been designed as a series of functions. As a teaching point, the development of Game as a class shows the built-in constructor or start-up __init__() usage. It also shows how methods are bound to an instance of the class and have the advantage of knowing which instance the method is operating on. The state of the game is held in class attributes which saves having to pass state between functions or keep the state in global variables. In the newly revised Python Basics, a letter guessing game an a number guessing game are developed using functions. It's an interesting contrast to see how developing a game using classes provides a very different approach.