There is neither the three states nor the witness; in non-dual reality.

The three states come into being because of ignorance of the permanent self. Thus, they have no existence of their own without a permanent self, which is the formless  soul. There is neither the three states nor the witness; in  non-dual reality.

Only when the wisdom dawns the waking become unreal. The man who believes himself as a person born in this world and world existed prior to him will not be able to assimilate self-knowledge or Brahma Gnana or Atma Gnana. 

What's most important to understand about the three states is that they are unreal in their nature. They are mere appearances, because there are impermanent.  Thus the physical self or ego is not the self because it is limited to the waking or dream. The true self is the formless substance and witness of the three states, which is the soul. The soul is apart and permanent.  The soul is the true self because the three states are dependent on the soul for their existence, whereas the soul exists with or without the three states, which appear and disappear in succession. 

The physical is not an integral, autonomous entity. The individual self, or what we might call the ego, is part of the waking or dream. The ego ceases to exist without the waking  or  dream. 

If one can view the three states on the standpoint of the formless soul  or consciousness as self, he becomes aware of the fact that, the true which is the soul is not subject to the birth, life and death. The true self is only formless substance and witness of the three states. 

To understand and assimilate this truth there is no need for the seeker to lose himself in the labyrinths of philosophy, but goes straight to the source from which they all arise and subside.