Hi, zep41, and welcome to the forum.
I presume Davie's point was that, even though the image in the mirror was clearly Pussy, the intention was not to actually convey that Pussy was alive in the room but that Tony's thoughts flashed to him in that instant. Tony's guilt and conflict over killing Pussy was a theme throughout season 3 and was the reason he beat the crap out of Georgie over the talking fish and had the awkward reaction to Meadow's Christmas gift that year of the same fish.
Re: Episode 3.02: Proshai, Livushka - Grades & General Revie
11Tony, his spirits crushed after b-lining to the fridge first thing in the morning: "Who ate the last piece of cake?"