Yūichirō realizes the illusion is fake because the "Mika" he sees is acting out of character. Through sheer willpower, he expels the demon and wakes up, proving he has the strength of heart required to wield Cursed Gear.
Shows significant growth by choosing his family's true wishes over the demon's false promise of revenge. Owari no Seraph (Dub) Episode 3
In Episode 3 of Seraph of the End: Vampire Reign (English Dub), titled Yūichirō Hyakuya faces his first major test in the Japanese Imperial Demon Army. Plot Summary Yūichirō realizes the illusion is fake because the
Disregarding Shinoa’s warnings, Yūichirō grabs the possessed axe. He is immediately pulled into a vivid hallucination of his dead orphanage family, where a demon masquerading as Mikaela tries to manipulate his desire for revenge. In Episode 3 of Seraph of the End:
Shown as a vampire soldier, marking his return to the story after the time skip. The Demon in Your Heart (Episode) | Owari no Seraph Wiki