I'm a 1 on this scale. It's like Virtual Reality, where you experience something that isn't your material space. You can manipulate those experiences, but they have an ethereal quality due to their lack of physicality. Not to mention bumping into things while distracted. While I haven't used any AR equipment, I imagine those experiences feel similar.

A good "tell" that I am in this imagination space is a blank stare while otherwise still engaging (conversation, work, etc) because I'm not (entirely) seeing with my eyes. It's the same with hearing, and to a lesser extent touch, taste, and smell. It also functions as a spectrum, with some experiences being stronger or weaker than others, particularly when I have material experience to fall back upon. My own memories work as stronger, more visceral experiences as I can ground the experience more than a brand new space conjured on the spot. However there is a limit. The details can be hazy or morph if I'm not paying attention to that part of the experience. Dreams are an excellent complementary experience of how side details can change to "fit" the experience.