He had a lot of people in his ear -- including the fanbase and the promotion -- talking him up to be the Australian blue chip prospect of this generation for the bigger weight classes. I think it was the Smith bout that initially broke his confidence, though. Biggest fight of his career that was going to cement him as a contender against a declining former title challenger... back-and-forth brawl which ended in such an unfortunate way. Then to have him get the lights shut off by a surging Hill immediately thereafter when he tried to rebuild and make another run... that was the final straw. I don't think he was really the same afterward.
Some time off to reassess wouldn't hurt him at his age, even if he does end up coming back. He can get mentally right, physically recuperate, and also develop his skill set.