How does Neo have simulation powers over the machines in the "real world" if it is not itself a simulation?
So it's at least three layers deep if not more.
This is one of the theories.
That right after Neo visited the Architect, the Architect really did destroy the 6th City of Zion in the real world when Neo chose the other door to save Trinity instead of Zion.
And while they were chatting, the Architect created a replica of the real world. Hence why Neo could not control the "bots" when he was in the "Real World" when he exited The Source room.
But that's one of the theories. The other theory, which is likely since the 4th movie came out, is that Neo was wireless connected to the matrix through the various devices in his body and he was not "authorized" to connect to the Matrix of Machines until after his visit to The Source. It's part of the "The One" program and a way that Zion is supposed to be saved/destroyed in the cycle the Oracle and the Architect setup.
We know this is true form the 4th movie because we find out that Neo and Trinity are essential to keep the machines running and highly functional. Also, the machines start to form friendships with Zionists and having fun "in the real world." They are also experimenting and creating flora to restore earth - information that the Machines wouldn't have. It's new science. New tech.
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