Perfection Island is where the first Naughty Bear story takes place.
It has lush forests and its people are cheerful. But they don't like Naughty Bear. Then he snaps on Daddles birthday and then the massacre began. They too have their share of paranormal and cryptozoology creatures, such as the Unibear, the Sand Dolphins (which is an actual danger present both on Perfection and Paradise) and the Golden King of the Fluffrogs. They seem to have a mix of outdated and modern technology. Most of the bears on the island (if not all) are male, as no bears so far have not been referred female, this could likely mean that the bears are possibly an all male race.
Not much is known of the geography or climate of the island. The only hints is the vegetation, heavily based on northen european and american forests and the architecture of the buildings. Mostly composed of wooden cabins made probably to survive heavy snowfalls in winters. Interestingly, the bears living in Perfection tend to be mostly naked and wearing gadgets like hats, while their Paradise counterparts have a wider wardrobe. The Narrator hints their fur being made to withstand harsh low temperatures at one point.
Being a rather small island, Perfection doesn't have many levels per se. Probably there are several towns (those bears will have to sleep somewhere!) but you cannot visit any of it in-game. This far, the only actual houses seen are Naughty's hut and Nibbles's house when it's area it's not being re-purposed for fit to the level's theme.
The central HUB, starting and return point of almost all the levels. It's a tiny, one-room cabin made entirely out of wooden boards and other discarded or repurposed materials, probably built by Naughty himself. The inside contains only a bed, a fishing trophy, a bird house hosting a fluffowl, a carpet and a somehow-working toilet. A car's and a boat's engine seem to provide electricity. The outside is a rather small glade with a fire and a Unibear statue and several gates leading to other areas of Perfection. There are rumors of a treasure behind buried in there...
The second widest area of the game. Nothing more than a re-purposed warehouse into a disco with a color-changing floor and a cheap DJ console, but that's where the bears go to jam to some tunes and have fun. The main building is divided in three rooms, the wider "ballroom", a bathroom and a simpler room where you can find a fridge and some arcades where the bears might barricade in case of attack. There's a small hut near the gates where the player can find some mines and bear traps.
The Cake Factory
The widest area of the game. A set of buildings were cakes and pies are made. You can find threadmills and giant mixers among with cooking stoves and fridges (probably for the staff). In a remote corner near the docks there's also a small clubouse, where the factory workers might go during their breaks. You can find a TV and an arcade in there among with a rather big tea service ready to smash.
A big house just in the outskirts of the woods with a nice view on the sea. It's featured in the Blair Witch parody trailer and it plays a central role in Episode 3 and Episode 8. It's a middle-sized area with three exits. One, deep in the woods, leads to Naughty's Hut and the other is a bridge leading to the cake factory. It haves a dock and a tunnel where the bears can escape and warn the FUZZ. It comes with a barbecue grill and there's a small radio where you can listen to a talk show. It might be Nibbles' house.
This is a small area that can be visited only in multiplayer mode. When a player gets killed, they respawn on this raft, a tiny floating platform made of wood planks and barrels tied together floating in the waters around Perfection and equipped with a somehow-working phone. Using said phone will allow the player to be summoned back in-game. The raft is never mentioned in-game.