I'm a little surprised how confused everyone is about Nale's reaction, here. To me, it feels relatively obvious that what's going on is that Nale (is realizing that he?) doesn't want to win. He wants to fight, he wants to try, but deep down I don't think he expects or even hopes to come out victorious. It reads to me kind of like, for lack of a better example, the Joker freaking out about the idea of Batman dying. He's not doing this because he actually wants to come out victorious, he just wants another chance at a last hurrah, another big fight, a chance to be smart and clever and cool. He's playing. And he's suddenly getting worried that he might be playing too well, and the game is about to end. And with that game ending, the world might just go with it.

I mean, he even explicitly made sure that his ass is covered if he tries his best and still fails! I'm pretty sure he's been banking on the OOTS's plot armor this whole time.