PROBLEM: Photon path dilemmas in interferometers manifest as an apparent ability of the photon to simultaneously take all paths through the device, but eventually only appear at one output. OBJECTIVE: This paper applies a non-local hidden-variable (NLHV) solution, in the form of the Cordus theory, to explain photon path dilemmas in the Mach-Zehnder (MZ) interferometer. FINDINGS: The partial mirrors function as tunnelling devices, that allow the photon structures to be directed to different loci hence legs of the apparatus, depending on the energisation state of the photon. Explanations are provided for a single photon in the interferometer in the default, open-path, and sample modes. The apparent intelligence in the system is not because the photon knows which path to take, but rather because the MZ interferometer is an unexpectedly finely-tuned photon-sorting device that auto-corrects for randomness in the frequency phase to direct the photon to a specific detector. The principles also explain other tunnelling phenomena involving barriers. ORIGINALITY: The originality is explaining path dilemmas in the MZ interferometer in terms of physical realism, and from a NLHV perspective. IMPLICATIONS: The physics of optics at the next lower fundamental level are theorised to be based on the photon having internal structures. This has the potential to provide new understanding of photon behaviour in theoretically challenging situations.