Phixius

Question: When Engywook explains the Magic Mirror Gate to Falkor, he says that the mirror shows a person their true nature. Brave men are cowards. Kind men are cruel. When Atreyu looks into the Magic Mirror Gate, why does he see Bastion?

Answer: Atreau is the main character of the book (like Bastion is to us watching the movie) this makes them the same, the main protagonist or the "story" It's a 4th wall break inside a 4th wall break. The Empress even tells him "he is sharing all your adventures, others are sharing his."

Answer: Atreyu, as the main character in this story, is the reader's avatar in Fantasia. Atreyu sees Bastion in the mirror because, so long as Bastion is reading the book, he and Atreyu are one and the same.

Phixius

Answer: Bastian is Atreyu if he were not afraid, while Atreyu is Bastian, a scared boy, inside. Bastian has connection with Native Americans as we see in the beginning of the story with the book cover.