Board Thread:Episode Discussion/@comment-1599757-20151212162645/@comment-3257939-20151217003727

It was indeed necessary for his Aura to completely drop to 0% so that he could get fatally wounded and frame Yang for it.

And yes, like you said, Mercury is cocky but also smart. He never stopped until Yatsuhashi was down so it doesn't make sense that he wouldn't do the same with Yang and simply assumed he had won. Especially because he was fully aware of what her Semblance can do. It's not just a cocky mistake, it goes against everything we know about Mercury.