Time to bring another New Generation Star Trek episode character to light, "Moriarty." The holodeck villain attains consciousness and seeks to remain in this reality. But, he is not to be trusted in our reality. So, Jordi builds a program cube in which Moriarty is "unknowingly" placed. Within this cube is a computer generated reality, much like a game such as online Warcraft. It is a totally contained alternate reality, which parallels present reality from all geographical and interpersonal perspectives. Moriarty is placed inside and allowed to believe he is free to explore this new Universe, which he is, but is unable to distinguish a computer generated reality from actual reality and remains eternally "trapped" inside.
"It worked," said the ghost of Juliet. And Island reality is nothing more than a ghost town, where all the ghosts think they are alive. Hence, we saw the island underwater, dead as it were, in one brief film shot. The dead talk with the living. But these players are not dead, but living in the real universe! Smokey thinks he is winning and has won by killing Jacob and yet remains unknowingly trapped in a program cube of genuine reality, which has been isolated from standard reality. That was the purpose of the bomb, to blow a hole in the membrane (see M theory, which is one step above String Theory) between universes and then cauterize the rift. Smokey thinks he has won and will be free once again to explore his universe and he is right.
How else do you explain surviving at the heart of a nuclear explosion? "They are not the survivors they thought they were."