Malvolio catches up with Cesario. He gives Cesario the ring from Olivia and explains that Olivia doesn't want it and has nothing more to say to the Duke, but would like Cesario to return to tell her how Orsino reacts. Although momentarily confused because he didn't leave any such ring, Cesario plays along by refusing to take the ring back. Malvolio, growing angry, throws the ring at Cesario's feet, then storms off.
Once again, Cesario shows his skill with love-games by picking up on Olivia's ploy with the ring immediately (ring were also common symbols of both sex and marriage). Malvolio, by contrast, exhibits his usual haughtiness and cluelessness.
Alone, Viola picks up the ring and realizes that Olivia has fallen in love with "Cesario," and that by taking on her disguise she has created an impossible love triangle: Orsino loves Olivia, Olivia loves Viola/Cesario, and Viola loves Orsino. Because Orsino takes Viola for a man, she has no chance with him; and because Olivia takes her for the pageboy Cesario, she is in love with someone who does not even exist. Overwhelmed, Viola remarks that only time can solve this mess.
By tricking others with her costume, Viola has trapped herself inside the "Cesario" persona, suggesting that how the world sees you has a profound influence on one's class and gender.Viola's realization of her romantic predicament deepens the melancholy she hinted at in Act 1, scene 5.