Since I'm using a different version of the text, I'm not sure of which encounter you're speaking. If this is in reference to Samneric's beast, Simon feels a sense of incredulity, finding it difficult to believe the beast was something immsense with razor-sharp claws who failed to catch the twins.
However, if you're discussing the first appearance of the Lord of the Flies, following the brutal killing scene, Simon does begin to understand the nature of the beast. He looks directly into its face, and it reveals the truth of their existence on the island, and the course of events that will follow. Although his conversation is imagined and comes from within himself, that is where the beast resides, because the beast is in everyone. In the end of the chapter he falls into the mouth of the beast as he slips into his seizure, just as the violence that will later consume him and the others emerges from within themselves. When the beast tells him he is part of him, Simon understands that it is real. And this revelation leads the beast to reveal that because he is a part of them, that is why they have not been able to accomplish anything on the island. Their characters are too flawed.