Cloud didn’t live up to his dreams. The stress was too much for him to bear when he went back to Nibelheim.
He got motion sickness on the way. The amount of stress probably took the extreme burden on mind and body.
Now everyone’s going to know he didn’t make the cut. At Nibelheim, he refuses to take off his helmet.
And I think he knows that other people know who he is. The cameraman, the random woman, Tifa’s father, Cloud’s mother, etc. all know, which contributes to his stress. One would imagine that Cloud would want it to escape from this situation, but he couldn’t.
This, of course, Cloud experienced other traumatic events. He didn’t make SOLDIER. Upon facing embarrassment from his friends, family, and neighbors, he experienced violence, death, kidnapping and then experimentations…for five solid years. What might this do to anyone’s mind?
Individuals who experience depersonalization feel divorced from their own personal self by sensing their body sensations, feelings, emotions, behaviors etc. as not belonging to the same person or identity. Often a person who has experienced depersonalization claims that things seem unreal or hazy. Also, self-recognition breaks down (hence the name). Depersonalization can result in very high anxiety levels, which further increase these perceptions.
Depersonalization is a subjective experience of unreality in one’s self, while derealization is unreality of the outside world.
It doesn’t help that Shinra rebuilt Nibelheim.
Cloud’s depersonalization-derealization disorder is why he sees his flashbacks outside of himself. He takes the role of Zack doing squats when in actuality he’s the motion sick grunt.
Cloud envisions himself as Zack answering questions Sephiroth is asking him as a grunt. Just as a grunt walks on screen, Sephiroth tells Cloud he can visit his friends and family.
So Cloud repressed a lot of his memories to stay sane and save face. But it didn’t work as well as he believed it would…