Nawaki, disguised as Hozuki Zangetsu, naturally could not have truly been killed by Utakata. Even for the sake of the war, he would never sacrifice a True Clone. With the various bloodlines he possessed now, the Wish Power required to exchange for a Kage-level True Clone was an astronomical figure.
The scene of death where he had supposedly been "corroded" into thick smoke by concentrated acid had actually been carefully staged by Nawaki. Anyone with even a little knowledge of chemistry knew that acid could not break down pure water. Even if the two mixed, they would at most form an acidic solution; it was impossible for it to so dramatically decompose water molecules into vapor. Even if Hozuki Zangetsu's Hydrification Technique retained part of his cellular structure, encountering Saiken's acidic chakra would at most severely injure him—it could never leave him without even a corpse. Nawaki's water Elemental Incarnation, meanwhile, could completely ignore this kind of acid attack!
Unfortunately, Utakata, who came from Kirigakure, had never received a systematic education and knew nothing whatsoever about basic chemistry. Coupled with Nawaki's masterful acting, he had not harbored the slightest suspicion and simply believed that he had truly dissolved Hozuki Zangetsu.
In truth, that so-called thick smoke had been fabricated with Boil Release. Having mastered Boil Release elemental transformation, Nawaki could turn his body into water vapor and alter its form at will.
After Utakata wrapped him up with his tail, he began slowly vaporizing his body, faking his death. Then, using the darkness of the cave to hide in a corner, he waited until Utakata fled before quietly drifting away through the sky while the Mist Ninja were not paying attention.
After Nawaki left, Kirigakure's higher-ups held lengthy discussions and finally barely reached a consensus: for the time being, they