I'm glad you bring this up, I've been interested in a discussion on this.

Drescher makes extensive use of the generalized concept of a "wake": in the ball case, a wake is where you can identify which direction is "pastward", i.e., to the direction of minimal inter-particle entanglement. Any mechanism that allows such an identification can be though of as a generalization of the "wake" that happens in the setup.

One such wake is the formation of memories (including memories in a brain), which, like the literal wake, exploit regularities of the environment to "know" the pastward direction, and (also like the wake) necessarily involve localized decrease but global increase of entropy. (edit: original was reversed)

So yes, I agree that Drescher is saying that the interparticle correlations are what determine the subjective feeling of time -- but he's also saying that the subjective feeling (memory formation) necessarily involves a local decrease of entropy and counterbalancing increase somewhere else.