Vaan: Who are you?
(Balthier): I play the leading man, who else?
From the moment he enters, Balthier refers to himself as “the leading man”. His face is upfront and center as if he’s introducing himself to the audience as well.
But it’s not that Balthier knows he’s breaking the fourth wall. This is just how the writers penned his character.
The writers Daisuke Watanabe, Miwa Shoda, and Yasumi Matsuno inform the audience that, at one point, Balthier was the “leading man”. They simply gave him lines to reflect this irrespective of how he comes across to us in the game.
Of course, this is just a reference to his original conception. At one point, Balthier was the leading man. He might have a lot of backstories, but he isn’t the main protagonist. Nor is Balthier the main character for that matter.
The homage itself breaks the fourth wall. But if you know his role in the story, the effect is comedic. Balthier’s the game’s witticism, and comic relief since much of his dialogue is humorous:
Balthier: An Atomos? All skiff, no ship. Hardly fit for a leading man.
Balthier: I’m only here to see how the story unfolds. Any self-respecting leading man would do the same.
Balthier: I am the leading man. Might need to do something heroic. Don’t worry, I’ll show you how to fly her.
Balthier: Princess! No need to worry. I hope you haven’t forgotten my role in this little story. I’m the leading man. You know what they say about the leading man? He never dies.
Character writing is an interesting thing. Because Balthier has these lines, it seems as if he knows he’s in a game. However, he’s speaking metaphorically. He’s can only see his actions from his perspective. He really is the leading man of his life, which is his story from his perspective.
Near the very end of the game, Fran finally retorts his nonsense:
Fran: I’d say you’re in more of a supporting role.
Fran says this not because she thinks he isn’t in a game, and not because his perspective doesn’t matter. She knows his role in the game. She’s playing off his metaphor to mock him. In a sense, Fran is straight (wo)man to Balthier’s funny man lines. Fran and Balthier are like a comedy duo in Final Fantasy XII.
Of course, sometimes Vaan comes along to mess up their routine…