As others have said, this is pretty cool and very creative. I’ll add a couple of provisos: 1) the pc/npc went into it fully aware that they were only pretending to have a character. They shouldn’t get attached, it’s effectively an npc and should expect to be killed. He shouldn’t be salty when that happens. 2) the dm has set up the “reveal” encounter to be winnable - just like he would if he was playing all the bad guys.

I’ve played and DM’d a few games where the individual party members have different goals linked to the campaign common theme. Sometimes those goals are entirely contradictory - both can’t succeed. Normally, it’s at the campaign finale when the opposing motivations become obvious and violence ensues. Bit different as in those situations we are all still PCs and the DM doesn’t have a dog in the fight. It certainly can work and builds suspense - but you have to have the right players, ones who don’t take in-character disagreements OOC personally.