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At the end of Chapter 15, Ludger becomes a Divergence Catalyst
During the final battle with Julius at Marksburg, Ludger enters Chromatus Level 3 and clashes with Julius, overcoming him and throwing them both into a Fractured Dimension. It is said that when a Chromatus Bearer becomes a Catalyst, it can either become an object or retain their humanoid form. In the case of the latter, the Fractured Dimension will become a reflection of their perfect world. With that being said, the FD that Ludger finds himself in after clashing with Julius has every major named NPC as well as your party members standing around in Trigleph. If you talk to them, you'll notice that everyone is in a good place. For example Leia is stated to have become a great reporter, and Elize seems to be making a new friend. Ludger would obviously care enough about the party to give them everything they wanted in his perfect world. If this is the case, the rest of the game could be seen as Ludger's Dying Dream.
It's actually Julius that's the catalyst. It's hinted repeatedly that overusing Chromatus will turn one into a Catalyst, and Julius has been using it since childhood, and was already nearly consumed by the mark of a catalyst when he fought Ludger. Also, it's only natural that Julius would want a world where not only were he and his brother happy together, but all of his brother's friends were leading good lives as well. Finally, Ludger kills him by destroying the catalyst with his Chromatus, which is necessary to return to the prime dimension as he did. If Ludger were himself the catalyst, slaying his brother wouldn't have gotten him back.