Here’s how I would run a false hydra. It can’t be the first bbeg for the party. Maybe the second or third. Early on, have the party come across an NPC they “convince” to travel with them. Don’t make it another DMPC, but just some flavor character they like. They don’t do anything of actual value, but exist. After they join the party, no other NPC acknowledges they exist. Adventurers are weird, what’s so weird about an imaginary team member?IRL, who wants to hear a DM have a conversation between 2 NPC’s? Then have them die due to an AoE attack aimed at another party member. The party will want to get revenge, but when they try talking to other NPCs about it, they’ll come to realize their friend never existed.

Now you have a fake story that isn’t really forced on them. To both the players and characters, the friend actually existed. Maybe when they learn the truth, the memories will fade, but everyone will still feel the effects of losing a friend. Since the friend never actually did anything of value, it’ll be easy to write off. When did they come under the influence of the false hydra? How did those earlier adventures actually go?