Frankly, I'm torn on this one. I have a few fantasies that I like to pretend are real because I think they prevent me from falling off the edge into the chasm of complete insanity, while at the same time recognising that it's not strictly sane to maintain the fantasy in the first place.

But this is something I consciously maintain. There are no elements completely beyond my control like visual hallucination.

The closest I get is the occasional flash of something I've been doing for a while if I close my eyes (basically the Tetris effect ), and maybe the occasional auditory equivalent if it goes quiet.

And yet, in my dreams I've had full blown conversations with people where I haven't expected what they're going to say next, so I suppose if all the above combined into one, I might have a similar experience to you, OP... but then I'd have to strongly considering contacting a medical or psychological professional.

Lapsing uncontrolled into a dream - however comforting that dream might be - when out in the world, could be dangerous for you or people around you. Imagine if you're driving. Or controlling some other form of machinery. Or heck, even pushing a shopping cart.