Of course, Olivia's jumpy all on her own; she heads down the hall and puts the key in her lock and she's freaked out by the sound of the ice-machine directly across from her room -- all the finest hotels put their ice machines out in the hallway -- making cubes.
Once in her room, she discovers that the lights aren't working, and she's in the process of calling the front desk when she hears thumping and banging calling from Walter's room. Jesus, she left him a minute ago!
She races back to discover him trashing the place, or, as I like to call it, "Playing Led Zeppelin." He's screaming about the hair on the bedspread, dead skin cells, strawberry juice, seminal stains and phlegm and urine on the carpet. Holy crap! Did he bring a blacklight?
Olivia yells that there's nothing there that can hurt him (which isn't exactly true) and that it's all in his mind and he calms down long enough to see the he clenched his fists hard enough to draw blood from his palms.
And then Olivia's wrapping bandages around his hands while Walter talks about his wounded pride, and the fact that he hasn't had an attack of mysophobia in years. Olivia marvels that with all that they investigate, some harmless germs make him shake in his boots. "Elizabeth, my wife, used to say I was a man of contradictions. She liked that about me," he says, and then gets serious as he says he liked everything about her. And hey, Olivia didn't know that his wife committed suicide after their son died. "I'm glad she never knew me like this ... afraid of things I can't even see," says Walter. Now, who's up for a root beer float? Walter cheers up immensely at Olivia's suggestion.
So down to a restaurant for a couple of floats, and Walter has a certain technique for drinking the float that he teaches to Olivia, and once he softens her up with superior float-drinking technique, he says, "'Does he pose a significant threat to himself or others?'"
Olivia doesn't catch on at first, so he admits to having seen the envelope by (mostly) accident. Olivia apologizes and says he wasn't supposed to see it. "It's all right. I've known for three years that this day would come sooner or later, that I was a burden to Fringe Division and to you," he says. Olivia tries to protest, but he says there's no need to sugarcoat it, that he has no illusions about the nature of the relationship. "I merely work for you. We're not family. If I should cease to be useful, if my behaviours are outweighing my value, well..." he says.