I didn't know the story past this chapter yet, but I do understand that in this 'memory' the Sovereign is actually Jin-woo (or it's predecessor) and maybe it's the image from the 'Future'.So yes, at the end of this chapter Jin-woo who's just watching this 'Memory' from afar are actually slowly become one with the Sovereign, and then completely become one. And also he's so surprised as much as us readers discovering that he actually had 'Two Hearts' inside his body. (Maybe this'll explained on a later chapter)
using his fist 90% ? remember how he fought Baran the Demon King, or Beru the Mutated Ant ? He's actually finishing them off with countless slice of dagger, and also did you know that often in game there's a big differences between 'Slash' damage & 'Blunt' damage. Some monsters or armors have a strong resistances over 'slash' damages, but weak on 'blunt' vice versa.I think the author got the references from that.