This episode is supposed to take place in 2003 and Mr. Belding is still the principal at Bayside and was still in his original office. But in the second season of Saved by the Bell: The New Class (1993), Mr. Belding got a new office after Bayside got remodeled and by the end of that series Mr. Belding chose to leave Bayside to become a dean at the University of Tennessee, Chattanooga near the end of 1999.
None of the events from previous episodes which are shown were recorded by the characters when they took place. Two of the clips, taken from Cream for a Day (1989) and The Mamas and the Papas (1989), are actually dream sequences.
No explanation is given for why the Class of 2003 was digging in the ground (which is the only way they'd find the time capsule) in the first place.