We know from the end of Disc 1 and the North Crater sequence that Sephiroth's will has some control over Cloud. This happened because Cloud had JENOVA cells in him and Sephiroth, born of those cells, used them to manipulate those that were injected with them. Sephiroth made Cloud hand him the Black Materia and almost made Cloud kill Aeris too.
After the battle with Safer Sephiroth Cloud goes nuts and sees himself soaring through that tunnel with Sephiroth at the end of it. Once Cloud reaches him they "battle" and Cloud is supposed to win. Then Sephiroth vanishes and Cloud imagines that he sees Aeris's hand come out of the lifestream. When he reaches for it he sees that it's Tifa's and he's still in North Crater where he was before going to Sephiroth. That is supposed to indicate that Cloud imagined that battle and he was really fighting Sephiroth's control over him. (It's all allegorical. Japan is in to that kind of stuff.) So what furzball is saying is that Sephiroth's image floating away from Cloud after that battle would be symbolic of his control losing its grip on Cloud.
Issues:
1. The Nibelheim basement notes strongly insinuate that Cloud's dip in the lifestream would be his third mako dosage, and that after three dosages a super-SOLDIER would regain his grip on his sanity.
2. If he still had Cloud's mind in his hands, Sephiroth could well have had Cloud simply seppuku on entering the Northern Crater.
3. We never see the 'floating away', and the camera angles / backgrounds for that battle are weird in other ways too. Ever tried to call that scene outside the level, or with a different background? It's safer to assume these were 'hacks' to produce particular effects, which the devs knew would never be uncovered (thanks to the fixed perspectives in every instance of the battle)
That said, I think Gemini is creating a false differentiation. Just because the fight is in Cloud's mind need not make Sephiroth's power over his consciousness any less 'real'. A fight in the lifestream need not mean taking on a tangible 'ghost' per se.