Daniel looked at Damien and gave him a sign. They both know how possessive Atlas is, and they've talked about it before. So, Damien knew he would be annoyed if he acted like he was having a good time.
He just wanted to tease him. Obviously, he only loves him. Atlas walked to the blossom tree, admiring it. How is it possible, and why is his soul split in two?
He is sure that Daniel and Damien are actually one person, but their soul was split. He met people like that before, and over time, he could tell. That's why they're so in sync, like they can read each other's minds.
The reason they were not as happy in the original timeline as they are now, is that they were in conflict. They have this inherent need to be close and get along, but when it doesn't happen, it creates a toxin in their soul.
Over time, it only grows and spreads until each part of the soul is severed from the other. That's what happened, that's why Daniel felt nothing when Damien passed away.
