

Indeed, it isn't so much as Jason just plain hallucinating Vaas' death, as it is Vaas DELIBERATELY causing Jason to hallucinate his death.Even when you finally get to what appears to be the only real part of the hallucination and impale Vaas with the knife that you just pulled out of your torso, Vaas' dead body awakens and looks Jason square in the eyes as he collapses from exhaustion. Then we have Jason shooting a bunch of Vaas phantoms that the real Vaas surely would have noticed and commented on. It begins with Vaas impaling a glowing ritual knife into Jason's torso, which is right off the bat pretty much impossible for both the knife to have glowed and Jason to have survived. The entirety of the fight sequence with Vaas seems far too out there to have occurred in any real capacity. Some of the Rakyat tasked with being back-up (who of course hang back until everythings said and done because pride and honor and other tribal macho nonsense) find you and manage to stitch you back together enough to haul back to Citra, who has plenty of herbal medicines to heal you in time to wake up. When you both fall to the ground and he looks at you it's just blood loss kicking in. You eventually reach Vaas, and the encounter happens where you kill him. So in the real world Jason is stumbling after Vaas deeper into Vaas's hideout, bloody chinese knife in one hand and salvaged SMG in the other blasting through the surviving pirates who are trying to kill him. The Vaas clones you have to blow through to get to Vaas (or sprint past, depending on how you ended that encounter) are actually just those suicide charger machete wielding enemies. But you're still alive, and get up, stab wound still there and bleeding quite heavily. After that Vaas leaves, rightfully thinking he's killed you, again. Vaas very clearly stabs you, starting the encounter. This is how I read the scene actually happening, drug trip aside.However, Vaas' eye stare could be interpreted as a sign that he is not dead.
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Finally, the point where Jason kills Vaas with the knife, thus honoring Rakyat tradition.When the Player kills images of Vaas he is re-enacting Vaas' "Definition of Insanity." This one is obvious so I'll talk no further about it.
