A farfetched possibility... perhaps Mwu's body was picked up during the heat/confusion of battle by the EAF; considering his history/value, as well as the developments taking place throughout that time, suppose the EAF managed to capture... most of him, a little after he was 'blown away'. Perhaps he was put through intense recovery and something similar to what the Extended are put through--hence his memory loss, or maybe memory 'hiding'? We know that the Extended are conditioned such that their memory is heavily compromised--I don't think they're, as someone in EAF (one of the earlier episodes) put it, 'brainwashed' (see: Stellar). Assume Mwu underwent similar treatment... if such were the case--Mwu being under a project/division relevent to the Extended operation--it would explain how Neo came to command 3 Extended and how he tends to say things reminiscent of Mwu's past.

Apart from that (going on the Mwu=Neo scenario), memory loss could occur due to lack of oxygen. Else, I've no clue.

Can't wait for the next episode, hehe.