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In the second and third installment of The Matrix, we see Smith assimilating basically the whole Matrix. Even though he did that and did not leave out Seraph and Sati, we can see them at the end of the final movie. Does Smith's assimilation really make him any more powerful? If Seraph and Sati were assimilated but came back in the end, is Smith's assimilation reversible?

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Smith's assimilation is clearly reversed after his destruction since we see the Oracle, Seraph, and Sati (all of which he assimilated) at the end of The Matrix Revolutions.

Smith's ability to assimilate is a variation of the Agents' ability to possess bluepills -- he controls their bodies but does not destroy them. If an Agent ends his possession of a bluepill then the bluepill will recover (albeit with no memory of his possession) unless the bluepill has been fatally wounded. The same occurs to the people and programs assimilated by Smith after Smith's destruction.

What Smith's assimilation does is give him the properties of the programs he inherits (not to mention another copy of himself to fight with). This is most clearly seen from his assimilation of the Oracle. In the final fight between Neo and Smith we see that Smith has acquired the "eyes of the Oracle":

Neo: It ends tonight.

Smith: I know it does, I've seen it. That's why the rest of me is just going to enjoy the show because we already know that I'm the one that beats you... Wait. I've seen this. I stand here, right here, and I'm supposed to say something. I say, "Everything that has a beginning has an end, Neo."... What? What did I just say?

Smith can see that he will defeat Neo before it happens because he has the "eyes of the Oracle" (though, like the Oracle, he can't see past Neo's irrational choice to give himself up, and therefore Smith can't see his destruction after he assimilates Neo).

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