Reminds me of this.
Perception is subjective so it's labile and heavily dependent on the owner's mental and physical state. And yes, our brain likes to fill in the gap to complete the image. I wouldn't say we live in a virtual world, objectively speaking. Perhaps at some stage, we temporarily remove ourselves from reality (like day-dreaming) but quite often, it's the real world we live in: say if a group of healthy people watch a car go past, I don't think any of them will say "a cat just went past". In assessing reality, we rely on the others' accounts to validate our version.
Obviously we rely on others, since by basic design they have the same brain as any other healthy person. So you'd expect them all to see the approximately the same image. Doesn't imply it's the correct one though.
Introduce an amazon indian who's never ever set foot outside the jungle and has no knowledge at all of cars.
What does he see? One can only hazard a guess, but he'd probably relate the object to something he knows. It's seems to be roaring, it's headlights resemble a predator at night, it's charging whilst roaring in your general direction. Since his reference cadre doesn't allow for mechanical objects, he'll see some horrible monstrous predator coming for him and take fright.
But sure as hell he won't say: i've seen a car.
And not doing that but taking those people, and ask them afterwards: What did you see?
Well they'll respond a car.
Ok, which color? There will a number of colors named, some accurate
Which make, males will respond on the whole correctly, females not
What was it's relative speed? You'll get any number, or just fast, slow
What plates did it have? mixed response.
Now let hem discuss among themselves and ask again.
Suddenly you get a a unified response where color, make, speed and plates will vary from reality.
And their reality diverges then from actual reality, but they don't know that. For them their memory is reality. Over the years, the memory will get polluted. Time, place, circumstances will get mixed with other similar events. At that point you live in a total virtual reality.