I'm starting to think the Kelevan/Golden Knot is an advanced A.I. of some sort with holographic technology.
I agree with the AI bit as I think that was the main point for the last Sukar story where a bunch of nanites rewired his brain a bit.
I don't think its holographic though. Definitely think it's all in his head, and its programmed for self-preservation. Hence it constantly suggesting to kill anyone who threatens its safety and influencing him to keep the Kaziri safe with him. Which, in turn, suggests that it might be some kind of potent defensive item. Which the town could certainly use with all the dangers building up around them now that their force field thing is dead.