The Vault 106 survivor is a vault-dweller who survived the experiment of Vault 106. The psychoactive drug being pumped through the air system left the survivor insane, only functioning on primal reflexes.
When the survivor's health is reduced below 80%, a hallucination starts in which the survivor disappears and the player is attacked by hallucinatory versions of their childhood bullies, Butch DeLoria, Wally Mack, and Paul Hannon Jr.
When the survivor's health is reduced below 45%, a hallucination starts in which the survivor turns invisible (the same as a Stealth Boy effect), causing you to miss most shots taken in V.A.T.S.
If the survivor is killed immediately when encountered, the childhood bully hallucination and Stealth Boy effect may not occur.
Alternatively if your companion kills him/her, nothing will occur until at least one hit is made by the PC.