R_E is in parallel with 1/g_m1 in a BJT small signal model due to the relationship between emitter resistance and transconductance. The discussion highlights confusion around the role of parameters like V_A and r23, indicating a need for clearer definitions. The analysis assumes β approaches infinity to simplify the circuit, suggesting that circuits dependent on β are less desirable. Participants express uncertainty about the implications of this assumption on the overall analysis. Understanding these relationships is crucial for accurately modeling BJT behavior in small signal applications.