Walter curtly says he's fine, and that the man is a "scientific anomaly" and nothing more. But Nina points out that Walter is making Peter's favorite dessert, and Walter says that he finds baking custard calms him, and seeing this man has brought up many things he tried to forget. "That night at the lake, you begged me to stop, but I couldn't. I couldn't watch Peter die, not again. I couldn't stand by and do nothing," he says.
Nina tries to interject but Walter steamrolls right over her, saying he's hated her for twenty-five years: "Had you not been there, the vial wouldn't have been broken, and I would've healed Peter on the other side. He wouldn't have fallen through the ice."
Walter blames Nina for Peter's death, and Nina seems to be handling this outburst rather well, probably because she already knows how he feels.
Also, he doesn't blame her anymore, because she was right: "I'd crossed the line. For the sake of one life, I destroyed two worlds," he says. Point of order -- the worlds seem to be doing relatively OK right now. I have been wondering what effect the Peter-erasal has had on the state of the universes. Better? Worse? We've barely had a glimpse of what the other world looks like now -- I'm going to assume it's relatively unchanged.
Anyway, Walter says he's come to terms with the fact that he deserves to be punished and suffer, but Nina tells him he's not the same man anymore and he's done everything in his power to repair the damage.
Walter's not really listening, though: "I saw my boy in that man's eyes, the way he looked that night in the ice, floating away from me," he says, adding that seeing his boy's eyes in that man's face filled him with indescribable joy. So why did he bolt? Because he doesn't feel he deserves that joy. "Why should I be rewarded for what I've done?" he asks, and Nina suggests he's suffered enough. She doesn't know why this Peter fellow is here either, but maybe Walter's been given a second chance. Well, a third chance, really. Don't let THIS Peter die, Walter!
Broyles goes in to Peter's cell, because he was told Peter found something. Peter dramatically swivels his computer around to show Broyles the screen and say, "It's a DNA sequence," but Broyles doesn't know why that's important to Peter explains: "I found six distinct genetic profiles on that memory from the shapeshifter tech. Apparently these things are able to switch between every single identity they've ever taken, not just one."