To project the deepest, darkest fears of a character into their world and to force them to deal with it is a time-honoured tactic of storytellers. This is a point of no return for the character, forcing them into a crucible where they can either deal, suffer or curl up and die. The character will not (and should not) be the same after this experience - it is a literal test of character.
To have this work, a character must have buttons to press. One reason that Jaws was so effective was the character of protagonist Martin Brody, a man afraid of the water - home turf for a great white shark. For him to be on a boat hunting a shark raises the stakes - when the Orca is sinking, it's a truly desperate situation for him.
Psychologists note projection of discomforting emotions, wishes or ideas onto others is a psychological defence mechanism. In extreme cases, these issues may present a character confronting the event as either antisocial, paranoid, narcissistic or psychopathic which can colour their relationships with other characters or the society they are part of.
To adequately deal with the situation, a character must learn and use an apposite response. This could be done by altruism, anticipating and handling it, humour, identifying with or adopting a persona or archetype, sublimating fears and hangups into positive change or keeping a lid on the problem to deal with it safely later.
Other endings are possible, ones where a character suffers to survive; from repression (hiding the issue) to rationalisation (justifying the wrongdoing) to reaction formation (behaving in the opposite way to the situation) to fantasy or denial of the situation's reality. These alternatives have ramifications on the story and also on the audience itself.
The projection option is one that is easy to abuse and best saved as part of a transformative sequence or as a setup for a climax to a story. Done well it can illuminate the character and provide fulfilment to the audience so it's worth doing groundwork on the character beforehand and looking at their options but also at how the situation may play out in context of the story.
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