Don't beat yourself up for not being able to realize who he really was from the beginning. At one time or another we all fall victim to an illusion. Stay true to who you are and what you truly want and things will fall into place.
This scene is when Liesel and Max reunite after the Holocaust. Max and Liesel were the main characters from the book that survived the bombing. Basically Liesel and Max were the only two they had left as a family.