Grant Steven Bowden (47) died on December 27 in 2018 - nearly 14 months after the incident at the Otago Corrections Facility, near Milton.
The coronial inquiry began this week at the Dunedin District Court this and will review his treatment while at the prison where he was on remand on burglary charges.
Coroner Allie Cunninghame would assess whether the events that led to the tragedy were preventable.
Yesterday the court viewed CCTV of the fight which showed a group of prisoners in the exercise yard on November 3 in 2017.
Nyal Heke, who was serving a lengthy sentence for a sex attack at the time, told the inquiry this morning that he went to a mesh fence to check the time when he was approached by Mr Bowden.
He said the man challenged him to a fight, which he declined.
Mr Bowden took a fighting stance and there was an initial scuffle before a lull.
Footage showed the pair came together again a minute later.
"He danced around me throwing punches," Heke said.
After evading several blows, Heke retaliated.
"I didn’t hit him with as much force as I could in that punch," he said. "It was more of a swing. I just wanted to get him off me."
The blow knocked Mr Bowden backwards, his head crashing into the concrete floor.
"His eyes were rolling to the back of his head. As soon as he hit the ground I could see the blood coming out of his head and ears and eyes," said Heke.
Corrections officers ushered prisoners out of the yard so Mr Bowden could be treated by medical staff.
Heke, who had 15 months added to his sentence over the assault, said he watched the aftermath through the window of a nearby games room.
"I was freaking out... I still have nightmares about this," he said.
Mr Bowden suffered a traumatic head injury and spent 12 days in intensive care during which part of his skull was removed to relieve the pressure from his swelling brain.
He was left unable to swallow food or fluid.
After being transferred to a West Auckland residential facility, he developed a severe chest infection. Mr Bowden died at Waitakere Hospital several days later.
Heke told the inquest the man had challenged him to a fight the previous day but had desisted at the request of another inmate.
He said he urged prison staff to remove Mr Bowden from the wing but that did not happen.
Mr Bowden - who had schizophrenia - had initially spent time in the prison’s at-risk unit before being moved to the remand wing.
Heke said he was acting bizarrely in the lead-up to the incident, which had aggravated others in the unit.
"He was trying to make it rain, doing rain dances and stuff," he said.
Mr Bowden’s family described him as "bright, warm and affectionate" and said he enjoyed sport, writing, music and art.
While supporting him had been challenging, they said he had taught them much about compassion and perseverance.
The inquest continues.
