Sebastian has responded to tragedies in his life with poor coping strategies. Coping strategies provide a framework for understanding intense experiences, past and present. Good coping mitigates and resolves distress, while poor coping diverts attention away from distress and, in the process, creates new problems.
Since before The Evil Within, Sebastian has struggled with Lily's presumed death and Myra's disappearance. We rejoin him at the start of The Evil Within 2 at his nadir. He has developed a new problem since we left him on Beacon's steps: he wrongly assumes personal fault when bad things happen.
By assuming responsibility for events beyond his control, Sebastian creates a framework that makes bad events understandable. Self-blame gives structure to the chaos of an uncontrollable world. Sebastian uses the coping strategy so much that he actually revises old memories to fit the pattern, rather than allowing evidence to challenge his assumed guilt.
The opening playable sequence illustrates how Sebastian's self-blame makes him an unreliable narrator. He is alone when he recalls the fire that took Lily, yet news reports in The Evil Within placed both Myra and firefighters on site for several hours. If a rescue attempt failed Lily, it was a group failure. Regardless, Sebastian removes everyone but himself from the memory, magnifying his role and, as a result, his burden of responsibility.
Sebastian interposes his ego between the himself and the truth, not only here, but elsewhere as well. He revises his memories of Joseph's death and Myra's leavetaking, blaming himself for each loss. His framework of self-blame automatically censors any information that argues to the contrary.
 
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