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This looks kind of like logic if you squint, but is actually a logical fallacy.

This issues is of course there are of course more than 3 options. If she had been deceived intentionally than none of the given three examples apply. Further, it assumes you can verify that she was 'telling lies' or 'insane' as an abstract property of her which is another mistake.

That said, I can see why someone might find it a useful introduction to logic.

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Eh? If she was deceived (intentional or not) she is in fact telling the truth, since to her it is real.

There aren't more than three option present, but you're more correct that you may not have enough information to deduct which option is a proper representation of the true fact.

There's no real issue with the logic, outside of arguing that making a conclusive decision here is perhaps premature. That's situational though.

If a kid says the magician cut their assistant in half they are not lying, insane, or telling the truth.

What someone observes, what someone thinks they observed, what they remember, what they say happened, and what actually happened are generally all different things.

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