With regards to those old discord comments, I found them a bit devious because 'hallucinations' do not fall under 'simulation' or 'it's all a dream.' This is to say I can clearly imagine a reality where Sensei is hallucinating 99% of what's happening, OR everything that's happened is framed as a book / game he's reading/playing, yet this would evade classification as "simulation" or "all a dream." Of course, in the first place, I'm not really dead-set on figuring out THE TRUTH and cracking THE PUZZLE, but when it comes to strong allusions that things are going on in Sensei's head, I am disinclined from throwing them out wholesale. For example, at this point I would be pleasantly surprised if Ami/Ayane/Maya are 'real' living people and not hallucinations, but even if they are hallucinations, I wouldn't interpret that as 'dream theory' it'd be a more elaborate 'how real are how hallucinations / how real is fiction if it affects us irl / it may be fake to us but it's real to them' etc type stuff.
By the way, at risk of implied spoilers, I would once again invite fans of LiL to read Subahibi. It is the same kind of "spew vomit from the bottom of your mind and call it a visual novel" kind of thing that LiL is. Which is not to say LiL fans would like it (in fact, I myself found it quite a chore to get through), but it is highly enriching when analyzing LiL since it's one of the main inspirations for it. Worst come to worst you can come out with more ammo for calling Sel a hack or something.
Mon panache!