Pathologic 3 has Daniil experience a lot of symptoms of various mental health conditions in very deliberate ways, but I think his memory lapses and non-linearity are specifically an exploration of a PTSD experience and shabnak is the heart of that. It all ties back to the first pyre, the moment shabnak says she was created, and the moment Daniil's mind breaks in exactly the way Simon wanted for his test. It's another round of the plague being an intentional ordeal to achieve transcendence in Simon's terrible master plan.

Plague!Clara talks to you as though you're Simon about it before we see it on Day 1. "What's happening to Dankovsky?" we ask, and get: "His head is breaking. Poor thing, really..." and"He's out at the Lot, head full of holes. Just like you wanted, really—broken into pieces so you could put him back together."

The images we get when we actually get to see when it happens? Harrowing. Daniil forcibly held back by men as the girl burns, screaming for someone to stop this horror. "What madness is this?!" he yells, "She's just a girl!! Murderers!"

And then we see him in the aftermath, sitting there alone in the dark, head in bowed among the smoking ashes. And crouching beside him calmly, newly birthed from the Earth's pain, is a smoldering Shabnak, just watching him like she's imprinting upon him the way a baby bird does.

(@snapshotsfromgorkhon X )

Shabnak tells our later Daniil, the one the player controls, that she's the truth of the world, the savagery of human nature, that Simon Kain. without question, laid bare. "Look at it, doctor. Look. Look," she insists. Daniil can answer her: "And I looked. Stood there and watched it happen. And did nothing." It's traumatic, it breaks him. Throughout the entirety of the game he is in a post-traumatic state. (This conversation is literally labeled "Trauma" in the game files!)

But like most things in this game, it's told out of order on purpose. The player doesn't get to see Day 1 until very late in the game. The cause is divorced from the effect, and we only see the symptoms of what Daniil experienced. There's an implication that the burning was so terrible that Daniil repressed it entirely (expressed as the player not getting to know it happened to him, unless they happen to have played an earlier Pathologic and can guess). Yet, he and shabnak play out this cruel pantomime over and over. He is constantly reliving the moment of trauma with her, and he sees it everywhere around him. She writhes and screams like that girl did and now he's the one who threw the match. Some of his voice lines when shabnak is burning are painful: "The Town went mad... but you, Dankovsky? How could you?"

And to tie it all together, whenever he starts to talk about this desperate struggle against shabnak he's done, he and the player get yanked out of the narrative and presented with his beloathèd rival Telman who... accuses him of going mad and killing regular, innocent human women because he's mistaken them for a superstitious steppe monster. (Where might he have heard of something like that happening before?)

Telman tries to make Daniil think he's as dangerous and violently misguided in his actions as the mob on Day 1... but the player hasn't seen Day 1 yet when that conversation with Telman happens. We can't fully understand why that accusation would be so uniquely painful to Daniil until later.

Telman interrupts again after the Day 1 scene too, though, in the middle of talking to shabnak, and he and the Inspector pat themselves on the back that they've solved this whole shabnak delusion: PTSD hallucination, that's all, nothing more.

And... they're right, but they're also wrong, because this is Pathologic and the things that are literal are also metaphor. The things that are metanarrative are also tangibly diagetic in-universe. The creature that is a mad doctor's trauma-induced hallucination is also supernatural and real enough to crush his ribs whenever she picks him up too roughly. He's too fragile a doll for her, but he's also her favorite one.