As so often in life: there is no line! If you are immersed in the game then it is, really that simple!

“Immersion” itself doesn’t have an absolute clear definition, people sometimes mean “feel like a part of it” and sometimes “getting lost in”. Both is fine :)

For games specifically it’s along the lines of “what does a majority feel”? To give a specific example: Legend of Zelda is often described as an immersive game - and I never saw why, just accepting that for many people it seems to be.