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At the end of S3E20 ("Death Benefit"), and made clear in S3E21, Finch peaces out for a while. Why does he do this?

He stated he'd be out if Reese killed the senator, but near the very end of that episode it's made clear that Reese did not kill the senator, as we see him talking on the phone in the car (and with no visible injuries) giving the go-ahead for Samaritan.

So then why did Finch leave?

My only guess:

We did see the senator's body in the house when the SWAT team moved in, that with the music seemed to want to lead us to believe, at least for a while, for dramatic effect, that Reese did kill him even though he didn't. But it was unclear to me what happened during that time, or what state the senator's body was in, or anything about that whole sequence, really.

The only thing I can think of is that Reese shot the senator but did not kill him, and that Finch believed Reese killed him, so he left. It's unclear and ambiguous, though, we never see Reese fire the gun, we only see him think about it.

So Reese shooting the senator and Finch believing it is only a wild guess. Nothing really supports or contradicts this (well, there is one contradiction: based on Reese and Finch's relationship as friends you'd think Reese would've told Finch that he didn't kill the senator, instead of letting Finch believe that he did then being all sad and surprised about Finch not being around later). But still I can't figure out why Finch left.

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It has been well established that Finch build the Machine to protect people, and he has a strict no-kill policy. He is devastated by the fact, that his creation was asking the team to kill the senator.

This quote from POI wikia:

Finch is shocked by the implications of the Machine asking them to commit murder and Shaw questions if its possible. Finch admits that it is but it would take the Machine predicting that taking a life would save many more though how many Finch is unsure of. The three argue the moral implications of what they are being told to do with Finch attempting to convince and even bribe McCourt into not letting the Samaritan legislation through. However, McCourt refuses to relent and Reese is persistent in their need to kill him as the authorities surround the house. Finch tells Reese that their mission has always been to save lives and if the Machine is asking differently of them than he can no longer do its work.

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    I see; it was the fact that the machine appeared to recommend killing the senator at all, rather than whether or not Reese actually followed through with it. Makes sense. Also, earlier today, before reading your answer, I found the answer too in an early season 4 episode which confirms this... although now I can't remember which (went on an accidental POI binge today...), it was after they all got new identities and around the time they were re-convincing Finch to start working again, and he stated his feelings on the matter explicitly.
    – Jason C
    Commented Nov 2, 2016 at 23:41

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