After the Cobra Kai were humiliated two years in a row at the All Valley Sensei Kreese had a complete mental and emotional breakdown. Something snapped inside him and he disappeared not only from California but from the US entirely.
He was spotted a couple of years later wearing full army gear in the jungles of Cambodia by a group of United Nations humanitarian workers. They tried to communicate with him to find out who he was and what he was doing in Cambodia but all he kept saying was "cobra kai never die" over and over again.
They tried to convince him to come with them to a hospital where he could rest and get some much needed medical care but he wouldn't, he just kept talking to himself and then suddenly ran off.
One of the humanitarian workers was able to snap the above photo before he disappeared back into the jungle.