Given how deeply Pyrrha believed in her destiny, it's very likely that she knew that heroes had the incovenient habit of dying in order to protect someone. She never denied this possibility and had made peace with herself in this regard (I believe this is the reason why she was so calm when she asked Cinder if she believed in destiny).

However, Jaune dying threw a spanner in everything she believed in. She couldn't understand that it was Jaune's destiny to die and not hers. So, with ridden with guilt she started to try to understand Jaune's mind, thinking desperately why he would do that, trying to get into his mind. Then, at one point, cognitive dissonance kicked in and she started to think herself in Jaune's terms, losing her way in the process.

That's how I see this AU could work, because that's a…complex premise.

…wow. This is really horrifying. The idea of this strong, mature, almost perfect girl broken so completely that she deludes herself into believing she is someone else, not being able to deal with the suffering of losing her love…

Though admittedly, it's also a fascinating concept. Now I want to read more about it.