Why isn't that a conspiracy theory? The government is mandating helmet laws to cover up the fact that its patrolling our highways with an army of motorcycle-riding kill-bots.
In the movie it's a hallucination brought on by an experimental drug the boxer's trainers are giving him to "explore his deepest power to destroy."
The movie is a bait and switch. We never get to see the titular Robo-Kickboxer again after this scene. In true Godfrey Ho fashion, scenes involving this actor are inter-cut with another movie which takes place in what appears to be a Filipino prison.