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The way it works is: Midnighter looks at every possible avenue. If it's within his power and resources to beat someone - he'll take that path.
You could look at it like chess. He calculates EVERY move, and EVERY possible move his opponent will make. Back and forth till there is a winner. He then makes the moves that make him the winner.
Now, lets say you want to pit Midnighter against Superman.
Using the chess analogy, Superman can now make (let's be conservative and say) twenty four moves to midnighter's one.
Or, we could say that Superman's pawns all become queens.
Or, we could go as far to say that EVERY piece of Superman's becomes a queen. Even the king - and the object of the game is STILL to get the king in checkmate. Which is now impossible to do so, since Superman's king is not on the board.
Midnighter can't possibly win. No matter how many times he calculates.
I'm not sure if my analogy is hitting home, so I'll explain it one more way:
If there IS an avenue to victory, midnighter will take it.
Another (probably fruitless, incoherent) metaphor: maps.
Say midnighter wants to get from downtown queens to ontario. Is there a way? He checks a map. He has a TON of possibilities. He could do thousands of different combinations of walking, swimming, flying, driving, or even bouncing on his friggin head to get from Queens to Ontario.
However, lets say his chosen destination is an alternate-universe Alpha Centuri(analogous to fighting superman again), and he doesn't have any sort of space travel options - much less DIMENSIONAL travel options. All he can do is walk, drive, fly, swim, sail, or bounce on his head.
He'll never calculate a way to get to this alternate alpha centuri because it's impossible to do so. There is no avenue he could POSSIBLY take to get there.
Does this make sense? At all? 😬.