[He can tell. This is why he was hesitant about bringing it up initially, because Sonic is going to have a difficult time with it. Of course he would, who wouldn't after hearing their enemy all but won? Shadow does Sonic the courtesy of only glancing over at him for a moment before turning his attention away, as if he's more focused on their surroundings than on the fact that the other hedgehog is having a crisis.]

I don't know all of the specifics, but it would seem he created an incredibly powerful item and imbued its power into a person. Infinite was capable of using illusions to fight, essentially creating an army for the Doctor as well as sending familiar faces at you to fight.

[But the most important thing is...]

He was defeated, and his Phantom Ruby seemed to have consumed him. That specific threat is unlikely to happen again, unless the Doctor finds another willing host for such an experiment. Given its failure, I doubt he will return to it. The world has since been freed of his iron grip, and the resistance is working on rebuilding.

[So the hard part is really just starting, but at least Eggman's no longer a threat.]