The story is another fine take of 1950s science fiction, with a neat 21st-century twist. A town named Edina has people who look deformed - sometimes. Are they "metamorphs," beings like werewolves who can transform themselves, either at will or under the influence of moonlight or something else? Not quite. The first hint we get of the truth is a beautiful butterfly which may really look like a bedraggled moth. It's unlikely the moth willed itself to look better.
But was moonlight the cause? Not quite that, either. Walter realizes what's really happening, as he remembers a US Army piece of research he worked on briefly in the 1970s - an attempt to render soldiers invisible by scrambled the optic nerves of all who see them. The experiment failed, and also left all inhabitants of Edina (where the research was being conducted) badly disfigured. The head scientist did his best to remedy this: he created an electromagnetic pulse which fooled the eyes of everyone who lived in the town, everyone who visited the town, into not seeing the inhabitants as disfigured. The town people could live quiet, normal lives, which could withstand the scrutiny of any one who happened by.
The plan, which has worked for years, begins to unravel when a boy - reminiscent of the kid who was able to literally change people's minds in Episode 2.7 (another excellent episode this season) - tries to leave town. A cop from a neighboring town picks the boy up on the road. The boy's true face becomes visible as the car leaves town, people from Edina can't let people outside the town know the truth, and several police are killed.
After Walter solves the case - quoting what an old "friend" said about "any sufficiently advanced technology [being] indistinguishable from magic" (that would be Arthur C. Clarke, cool tie-in!) - Walter pleads with Broyles not to report the discovery, so the people of Edina can return to their quiet lives. It's a great moment, for Walter, who's been a showing more heart and less insanity with every episode, and Broyles, who grants Walter's request. Like the ending of The Menagerie on Star Trek, the ending of this episode of Fringe gives the disfigured the opportunity of continuing to live their lives with their saving illusions. (This episode also reminded me of the classic Twilight Zone "Eye of the Beholder" episode, though most of the two stories are quite different.)
And as a coda, Walter tells Peter that he's grateful that Peter has chosen to see Walter in a good light, which shines a light on the question of how long will Walter be able to keep Peter from knowing his true identity - unless, maybe, Peter already knows it.
5-min podcast review of Fringe
See also Top Notch Return of Fringe Second Season ... Fringe 2.2 and The Mole People ... Fringe 2.3 and the Human Body as Bomb ... Fringe 2.4 Unfolds and Takes Wing ... Fringe 2.5: Peter in Alternate Reality and Wi-Fi for the Mind ... A Different Stripe of Fringe in 2.6 ... The Kid Who Changed Minds in Fringe 2.7 ... Fringe 2.8: The Eternal Bald Observers ... Fringe 2.9: Walter's Journey ... Fringe 2.10: Walter's Brain, Harry Potter, and Flowers for Algernon ... New Fringe on Monday Night: In Alternate Universe?
See also reviews of Season One Fringe Begins ... Fringe 2 and 3: The Anthology Tightrope ... 4: The Eternal Bald Observer ... 7: A Bullet Can Scramble a Dead Brain's Transmission ... 8. Heroic Walter and Apple Through Steel ... 9. Razor-Tipped Butterflies of the Mind ... 10. Shattered Pieces Come Together Through Space and Times ... 11. A Traitor, a Crimimal, and a Lunatic ... 12, 13, 14: Fringe and Teleportation ... 15: Fringe is Back with Feral Child, Pheromones, and Bald Men ... 17. Fringe in New York, with Oliva as Her Suspect ... 18. Heroes and Villains across Fringe ... Stephen King, Arthur C. Clarke, and Star Trek in Penultimate Fringe ... Fringe Alternate Reality Finale: Science Fiction At Its Best