DAMMIT I KNEW ALL ALONG, THAT HANDSOME PIECE OF SHIT! AHHHHHHHHHHHH! Never trust a guy whose name rhymes with sketchy.
That entire sequence is absolute greatness, had me second guessing if I was doing the right thing and then if I'd fucked it all up.
As an aside, I transfigured Bugs into a weapon for Makoto after securing the treasure route and forgot about it, so it caught me completely off guard when she showed up to the boss fight and started punching away with a teddy bear strapped to each fist. Ridiculously good.