The Tale of the Dark Knight (DRK Spoilers)

[Mieck]

the maelstorm guard is actually still referring to Fray at that point.

It can be read two ways;

Mieck, madam, I... You have every right to be upset, but...

Styrnlona looks at the overbearing trader in despair. The use of the word "madam" (or "sir", I suppose), is the part with two meanings. Does he mean Fray? Or is he simply addressing you formally because he's just heard you chew the merchant out and he might get the same treatment if he appears over-familiar? Fray has already disappeared from shot and your character is facing away. Styrnlona then addresses the only person remaining.

...I think he understands, madam.

Your character's perception is what is important here - just because people seem to be addressing Fray, we know afterwards they are not. I know it seems like I'm twisting in knots to follow this line of thinking, but (and I accept this can be put back to me as a counter argument) text that comes from NPCs is pretty unreliable in this quest line because of the state of mind your character is in. In effect, they see what they want/expect to see.
To reinforce the Tyler Durden role, Fray actually even quotes him, almost word for word in the scene immediately afterwards on Moraby Dry Docks

Only when you have renounced everything are you free to do anything.

It's only after we've lost everything that we're free to do anything.

[saber_alter]

It can be read two ways;

yes, i noticed that.

note that whatever you gender is is the gender people refer to fray as. if your a guy, fray talks like a guy. if you a girl, fray is a woman trapped in a man's body.

[Allyrion]

I got the impression that them looking at Fray was in your head, and when he talked you were talking.
I actually realized there weren't two people due to how the conversations went. It's just not how you address separate people.
Fray never needed to introduce himself and he just continued the conversation.

It's ambiguous, but I think Fray only manifested physically at the very end. The conversations before would just be really weird and awkward.
I don't think it mattered that people looked at Fray, because if we were talking when Fray was (which was my impression) then our perception wasn't the reality.

Actually, I thought the accusation of us talking to a corpse was a big reveal in itself.
If Fray was just undead, he wouldn't be hanging out in Ishgard (even in the Brume) or people would've made the accusation earlier when we fought side by side with him outside the Tribunal.
No one ever acted like Fray was suspiciously undead (or even openly acknowledged there were two people in front of them).

I'm pretty sure when they said we were talking to a corpse, that didn't mean we were talking to some zombie.
I took it as we were hanging out by the real Fray's corpse (who is still slumped and dead) talking to ourselves (Fray in our head) for quest pick ups.
So we really looked like we were talking to a dead body. And that's what they buried in the end.

[Rannie]

Ehhhh then explain the whole darkness surrounding us then surrounding the corpse after we first reach out to touch the soul crystal. That whole thing looks as if a transference of energy (of the darkness kind) is taking place between the two bodies.

[Allyrion]

Ehhhh then explain the whole darkness surrounding us then surrounding the corpse after we first reach out to touch the soul crystal. That whole thing looks as if a transference of energy (of the darkness kind) is taking place between the two bodies.

I took it as a transfer of power, not from us to him but the opposite.
After we picked up the soulstone, we absorbed part of his power and shadow. Both things imbue the figment of Fray with the knowledge to guide us to being a Dark Knight.
I don't think it needed to be more than that. It's not like it shows us either side getting drained more and you pass out during the process.

The first few lines also sound like the words of the dying Fray, so I'm pretty sure we were absorbing his soul.
Or you could say an inheritance of power, much like the soulstones are.

[TheCadian]

The more and more I go through these quest the more Fray's perspective makes sense to me. People keep asking me for things.....half the time they won't even give me anything worth having. Sometime I just want to pick up the quest giver, hold them over a ravine, and say...

"I'll kill X and Y or gather Z for you and when I return you will have something for me. If I don't like what you have I will chose something else you own and take that instead. Not because I want to hurt you, or because I am avaricious, but because I have done you a service and you owe me dammit. Now if you have nothing more to say I will let you go home and you can wait for me there."

[Dualblade]

One thing I'd like to point out is that he also metions Sidguru when you first arrive at the Docks during the 45 quest. I say He here because even though my character is female, Fray was male and that scene had to be the "real" Fray's sould talking. I assume that his sould was the one who started teaching you, with your own darkside taking over more and more as time went on...I also agree with the part about our darkside (and, possibly, Fray's own soul not quite moving on.) taking over the corpse.

As an aside I hope one day when our levels go up again, we get an ability that lets us call our dark self to mirror our moves, basically giving us two attacks per turn for all moves (the dark self's attacks would be at half strength...I miss Command Mission...)

[saber_alter]

As an aside I hope one day when our levels go up again, we get an ability that lets us call our dark self to mirror our moves, basically giving us two attacks per turn for all moves (the dark self's attacks would be at half strength...I miss Command Mission...)

I wouldn't mind this. I also wouldn't mind interacting with our other self again, maybe as the next job giver. Working with it to better harness the abyss, that boils up into an all out battle against them again...or fighting against an onslaught of enemies with other self.

[Aptrgangr]

The knight's up and ready, identifying themselves as Fray, and offers to train you in the ways of the Dark Knight to go rescue a falsely-accused woman.

It was my understanding that the woman wasn't just falsely accused; the holy knights were actually abusing the power of their positions to harass her and get away with it, knowing full well that she's innocent. It seemed to me to be implied that she wasn't the first person they'd done this to.

[Cilia]

Most of "Fray's" appearances are ambiguous, but at the very least s/he is physically there during the 50 quest. There's no way you could have gotten to Whitebrim Front and beat up the soldiers, then arrived with the healer knight; the soldiers also gasp in terror when "Fray" glares at them, and the knight gasps when "Fray" leaves Fray's body and physically manifests as your shadow.

All the other appearances are ambiguous. Take them however you wish.

I'd also love the return of our shadow in future quests primarily because it would probably be very, very personal and introspective again instead of the story ultimately be about somebody else (like literally every other storyline in this game). Can't think of a how or why our shadow would return, though.