I think Will is locked in a mental institution imagining the events that we're seeing on the screen mixed with real horrendous experiences that he went through as a younger self. If you think about it, how can nobody recognize him if he was jailed for something that happened so publicly, and how was he allowed to move from state to state immediately after he was released from prison?
If you look at the age of the characters during the events that happened to him as a soldier and after serving years in jail, he and Willem Dafoe's character pretty much looked the same or identical as they did inside the prison scenes and at "present" time.
I believe Cirk was actually Will at his younger age when all the traumatizing events happened to him. If you notice throughout the movie, Cirk just randomly appears and disappears as Will starts thinking about him to have a "conversation," and he just randomly finds him on some random couch inside a large casino. Also, when La Linda was talking to Will, Cirk would walk behind them or just walk away, and when Cirk would "take over" his mind, La Linda would talk with Cirk privately without Will's presence and he would suggest to both of them to hookup like a little kid. It also seemed like Cirk knew all the details as if he were an undercover agent, and we never saw the scene where Will claims he did a "research" on Cirk.
I also believe La Linda was his caregiver or a nurse, because of the way she was introduced just sitting on the side of the table observing the players looking like she's the authority. Who does that in random casinos? La Linda seems like a pretty weird name too, but if you think about it, that's probably how Will learned her name when she introduced herself. Being that he's probably mentally institutionalized, he must have had some speech impairment that made him pronounce her name as "La...La-Linda." The big tell that she was his nurse, was at the end of the movie during the final game. The way she guided Will to the table holding his hand was more of a caring gesture, rather than looking like "lovers" falling in love.
All the background characters also looked off beat or very hyperactive. Pay closer attention to their hand gestures when some of them sat down next to La Linda during the final game. We also kept hearing Mr. USA cheers every time Will was in a playroom or "casino" of the hospital, just like a typical mental institution would sound like.
There are more subtle instances that happened throughout the movie that made it seem strange and kind of unrealistic, especially the way Willem Dafoe delivered his lines. A lot of people criticized that it sounded like he "read" his lines, but knowing how good of an actor he is, it was obviously intentional. Also, notice how he didn't even try to defend himself against Will, and just willingly went to the room to be tortured.
All of this was just in his head, and we are left to interpret what really happened to get him into this insane mental state.
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