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I think during National, Niou just didn't dare to take the risk of being Sanada/Yukimura/Ryoma since he didn't know how Fuji would counter them.
Tezuka was known as #1 in Seigaku --> Shiraishi won again Fuji : So, Niou just take safe illusion that he pretty confident would win against Fuji.
Since it was illusion with no actual players' spirit, Niou didn't know how to react after experience the Hoshi Hanabi.
& just with 1 game left i doubt what else Niou can do.
Niou can try to take other powerful players techniques as illusion but I think he just panicked.
So many players & techniques to consider. By the time he made the decision, the match would just end.
That's y he lost to Fuji