Collusion, stupidity, or otherwise?

[dauler]

I'm new to shorthanded, so I don't know if this type of thing is normal, but I have never seen something that just makes me shake my head in amazement as much as this. It just doesn't make any sense to me why the CO in this hand would be raising in his position unless he were participating in collusion, it's a completely unnatural action, it's hopeless as a bluff and anyone who wouldn't fold would go for the free showdown. The CO hadn't previously shown any erratic tendencies in the 20mins that I had been at the table(other than normal somewhat dumb stuff), is this blatant collusion? I don't know what to do.

Party Poker 1/2 Hold'em (6 max, 6 handed) converter

Preflop: Hero is UTG with K[img]/images/graemlins/heart.gif[/img], Q[img]/images/graemlins/club.gif[/img].
<font color="#CC3333">Hero raises</font>, <font color="#666666">1 fold</font>, CO calls, <font color="#666666">2 folds</font>, BB calls.

Flop: (6.50 SB) 3[img]/images/graemlins/spade.gif[/img], K[img]/images/graemlins/spade.gif[/img], 8[img]/images/graemlins/club.gif[/img] <font color="#0000FF">(3 players)</font>
BB checks, <font color="#CC3333">Hero bets</font>, CO calls, <font color="#CC3333">BB raises</font>, <font color="#CC3333">Hero 3-bets</font>, CO calls, BB calls.

Turn: (7.75 BB) 8[img]/images/graemlins/diamond.gif[/img] <font color="#0000FF">(3 players)</font>
BB checks, <font color="#CC3333">Hero bets</font>, <font color="#CC3333">CO raises</font>, <font color="#CC3333">BB 3-bets</font>, Hero calls, <font color="#CC3333">CO caps</font>, BB calls, Hero calls.

River: (19.75 BB) 9[img]/images/graemlins/heart.gif[/img] <font color="#0000FF">(3 players)</font>
<font color="#CC3333">BB bets</font>, Hero calls, <font color="#CC3333">CO raises</font>, <font color="#CC3333">BB 3-bets</font>, Hero calls $2 (All-In), CO calls.

Final Pot: 27.75 BB

Results in white below: <font color="#FFFFFF">
BB has 9s 8s (full house, eights full of nines).
Hero has Kh Qc (two pair, kings and eights).
CO has 5c As (one pair, eights).
Outcome: BB wins 27.75 BB. </font>