in full cognitive possession of the Truth at the end of the film
Of course. We probably misunderstood each other because that's clearly the point of his character's development. Him morphing into a full-scale hypocritical politician resp. servant to the powerful. Who from thence on would continue to promote the same slogans as before while being fully aware of them being lies.
My assumption was that he - the counselor - had been lied to, too, from the outset. He actually appeared to mean it when communing with the red armor suit. And seemed to believe in what he's been told about the "martial valor" of the house, presumably by his superiors.
But effectively they all appeared to be rookies. Illustrated by that second of Motome, Hikokuro, who kept bragging about which school he came from instead of which battles he fought in.
Except maybe the older guy sitting next to the counselor. He was the one that suggested to give Motome a few coins and send him away. Because he probably knew already, by own experience, how the textbook theory about bushido and reality differed.
And yeah, the way that actor - Rentaro Mikuni - conveyed emotional reactions was totally gripping. During both sequences, when Motome performed seppuku and when Hanshiro battled the crowd in the yard, while he sat in that room turned toward its entrance.
There's a moment where he made a motion to stand up, like he had made up his mind and decided to intervene, just to sit down again and turn away from the entrance as foot steps could be heard approaching. To conceal his distress towards his subordinates.
A very intense moment, of realization and inner struggle. Where he appeared to understand the scale of the atrocity they had committed against Motome. And that he had to make a decision now, which path he was going to take.
Frankly, despite his occasional arrogance, I almost felt sorry for that guy in the end.
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