Tsumugi, along with fellow survivors Himiko Yumeno, Maki Harukawa, Shuichi Saihara, and Kiibo decide to re-open Rantaro's case after discovering new truth related to his murder. Upon finding out Rantaro's talent as the Ultimate Survivor, and proving that Kaede did in fact not murder him and was executed unjustly, Shuichi realized that the mastermind has to be one of them and, by double-checking everyone's alibis during Rantaro's murder, honed in on Tsumugi as the true culprit and mastermind of the New Killing School Life.
Tsumugi denied the claim vehemently where-as the other survivors are confused and shocked that the Ultimate Cosplayer could have gone through with such a plan. Shuichi however, made it very clear that Tsumugi was the only person who could have murdered Rantaro by using the hidden passageway in the girls bathroom, which also led into the hidden room that connected to the library. She also did not give the same order to Mother Monokuma as the other survivors did (Aside from Kiibo who was rampaging at the time and thus not present), saying "make" instead of "birth", which would have triggered its voice recognition software and created another Monokuma, proving that she would be the mastermind. All this combined causes Tsumugi to break and reveal herself as "Junko Enoshima the 53rd".
Tsumugi, now cosplaying as Junko, went on to reveal that everyone's memories of being students at Hope's Peak Academy was all a false memory planted into their brains by the Remembering Light. In reality, everything they remember about attending Hope's Peak Academy was a lie. What they remember about Kokichi Oma being part of the Remnants of Despair was a lie as well, much to everyone's shock.

In reality, the circumstances behind their killing game are far more cruel. After proving her talent fully as the Ultimate Cosplayer by cosplaying as some characters from Danganronpa: Trigger Happy Havoc and Danganronpa 2: Goodbye Despair, Tsumugi revealed that everything has been broadcasted to a very peaceful world that have been enjoying watching the students of Ultimate Academy for Gifted Juveniles kill each other, essentially revealing everything that they've been through as a reality-TV show and "Extreme Real Fiction". She also revealed that everything that took place in the Hope's Peak Academy Saga were nothing more than fictional events from a very popular anime and game franchise known as Danganronpa.