: The way I interpreted this was that the green broken-Durandal text is what
: the main character sees. The white text is just for us players, and the
: split caused by breaking the circuits is Double Aught's way of showing us
: both. In a way, this is a microcosm of the narrative device used with the
: failure timelines; there is the option of simply missing them and missing
: a portion of the story, but diligent players will find it.
To elaborate, I think that once the main character breaks the circuit, he sees a blank screen, while we see the white text. While we travel to a dream level, the main character is stuck at the bottom of a pit with a dead terminal until the Pfhor capture him.
Whether you believe Chapter 4 is a continuation of Chapter 3 or its own separate timeline, Chapter 4 shows that the state of things at the end of Chapter 3 can still lead to success. There's no reason for the main character, or any other entity, to switch timelines at the same moment the player does.
Also, no matter what your interpretation is, the main character does get captured by the Pfhor after destroying Durandal in at least one of the timelines.
To me, this split terminal ending is strong evidence that our experience is different than the character's and that our timeline switches occur at different moments from the character's.