I return to Zhuangzi's dream that he is a butterfly. I won't say anything I haven't already said many times before, but there are things which bear repeating.
Zhuangzi wakes up to realize that he has been dreaming he is a butterfly and wonders if perhaps he isn't that butterfly dreaming he is Zhuangzi. His true 'awakening', therefore, isn't from a dream, but to the dreaming. He has been loosened from the belief that he now knows what is reality and what it is not. He may be Zhuangzi, or he may be a butterfly, or he may not be at all. He's become "unfixed".
"Awakening" for Zhuangzi, therefore, is not coming to realize the truth about reality, but to realize not-knowing it. The truth is he does not know. Nor does he need to know; for he understands this not-knowing as an opportunity to discover a way of freedom outside the boundaries of cognition and identity.
He seems for the moment to be a man named Zhuangzi and enjoys being that; but he does not need to be or remain that to enjoy himself. He makes no investment in any one, fixed identity and thus does not fear its loss. Whatever happens is fine. He doesn't need to be anyone.
The story is also careful to tell us that this is not an identity which simply finds different expressions, now a man, now a butterfly. Rather, it tells us that "these are two distinct identities". Zhuangzi is not the butterfly, nor is the butterfly Zhuangzi. Because there is no continuity of identity between them, any suggestion of a transmigration of identity is abolished. Each identity-expression is uniquely itself and non-transferrable. Now a tree, now soil, now another tree — though there is no continuity of identity, there is something beyond identity that unifies them, and it is this that Zhuangzi calls Dao and into which he releases himself as beyond identity. "Dao throughs as one." Dao is understood as that beyond identity from which every identity arises and into which every identity returns as beyond identity.
Zhuangzi sees all this as an opportunity for a release from what binds us. To grasp a “fixed-identity” is to fear its loss. To understand ones identity as “a temporary lodging place” is to release into all possibilities. To believe that you can “discover who you really are” is not only to project the idea that you really are a something, but to set yourself upon an idealist path of never actually being who you are.
You can check out Scott's writings on Zhuangzi here.