I agree that it doesn't make much sense, unless it's entirely involuntary. Presumably the "Fear" demon experienced fear and something triggered their combination. But they also started combined, so.. I don't know. His new Kanji says "monk" though so presumably he "unlocked" some form of enlightenment.

Pragmatically, he's just unlocking his final form for whatever reason.

Tengen's arc so far has felt way better, I agree.