The answer to the first question:
Yes it was a flashback, and the reason for the whole scene in the end is to indicate that Cynthia was not emotionally involved for Itami (maybe the reason why the director chose to create such a separation between Itami and Cythia in the beginning) but rather, Cynthia was really in love with Xie Ming(indicated by the sexual interaction between them). And that's why Cynthia look abruptly hurt after Itami said that Xie Ming has been killed. The whole scene at the end just portrayed that before all of the operations happened, before meeting Itami, before the death of Szeto's girlfriend, Cynthia and Xie Ming were already physically and emotionally involved intended to portray the irony in the fact that he arrange for all those deaths to be with the girl yet she was in love with another.
Answer to the second question:
Actually, if Cynthia has stabbed him there would be a weapon in her hand right afterwards. With regards to that, it was a wound that was sustained before. Maybe the reason why the director portrayed it is because he had just given up his job (the security of Yamamoto) to be with this woman, and he too realized that she was not in love with him. The shot was meant to look like she stabbed him but it was meant to be a physical metaphor that she hurt him.
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