“Words were different when they lived inside of you.”
― Benjamin Alire Sáenz, Aristotle and Dante Discover the Secrets of the Universe.
Shouldn't it be "...when they were living inside of you."?
It is correct. There is no grammatical requirement for clauses following the "when" conjunction to be in the continuous tense, especially not with verbs like "live" that already indicate a state, not an action.