Of course it's real! It's thoroughly freaky though. Those interloper guys are REALLY freaky. What I don't really understand is when Link runs up to them in slow - motion and they cast their magic - stuff at him, he dissolves and replaces the interloper in the middle. Then he gets all "Oh. I'm evil now. Cool. World domintaion is at hand." I don't get that. It makes no sense! I've seen the cutscene at twice. Someone finally posted it on Youtube, I watched it there and I STILL don't get it!
Would someone try to explain how for a brief moment Link became evil?

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