My uneducated guess is that even though he's looking at you and your wife he's not conscious and still 'asleep' until the part where you notice him actually waking up.
The real answer is, if you're concerned about his health or safety because of this issue, you should ask your pediatrician. If it was me I'd probably just let it ride and see if it's a phase he's growing through. I had night terrors at different points of my life, even in adulthood, and it was infrequent enough I didn't worry about it much as distressing as it could be in the moment. It would always go away for a long while after a couple nights.