That’s until you hit trance states of consciousness. Then perception of “reality” changes quite a bit.
I knew I was on a bus, because the sounds and feelings maintained continuity with reality. But the details I saw were completely made up. My eyes were closed, I think, but it didn't feel like that was connected to my ability to see. Because of the swaying motion of the bus, I knew where we were, and the scene I was "watching" was based on that. I was able to move, and think normally about my day, and did not notice that I had fallen asleep.
Of course, I eventually woke up. Reality was significantly less pleasant than my dream. The dream bus had been much less crowded, and clean, and generally more atmospheric and warm-toned, even the sunlight.
Does that sound similar to what you meant by trance consciousness?