The sort of experience/hallucination proposed in the OP has no real-world equivalent, we have not collectively assigned a word to it yet. — hypericin
The simulation is indistinguishable from reality, recall, yet the experience "has no real-world equivalent"?
To be indistinguishable from reality means that the simulation is experienced as reality. In this sense the experience has a "real-world equivalent". But this sense is switched into another sense when you talk of the experience as having no real-world equivalent, since it is not reality that is experienced but a simulation of reality.
By vacillating between these two senses of what is experienced we are promised that one could be fully immersed in a simulation, and thus experience only simulation and no reality. Like a brain in a vat. But I think the promise is based on a fallacy of ambiguity.
"Hallucination" denotes that the experience originates from within the brain, probably from some temporary or permanent brain disorder. Whereas the "experience" of the computer game, or the OP's simulation, arises externally from the brain. Whether it is veridical doesn't matter. — hypericin
What could "..externally from the brain." mean?
Let's say the proposed future brain-computer interface (BCI) has replaced your eyes, so instead of seeing things the BCI stimulates the brain to evoke the experience of seeing things that the computer constructs, like the things we see in computer games.
But when you play a computer game the things that you see, e.g. real light, real screen, real images (that simulate the optic features of things), are not inside nor connected to your brain's perceptual system. What you see is external to the process of seeing. In this sense your experience of the computer game is veridical (it doesn't matter if the real images that you see are images of fictional things).
But when you skip the real light, screen, and images, and replace your eyes with a brain-computer interface, then the relation between brain and computer is basically the same as the relation between brain and a mind-altering drug or decease. Hence 'hallucination'.
By vacillating between the sense in which a computer game is being experienced, and the sense in which the experience is a process in the brain's perceptual system, we are offered the promise that in the future the computer game could be played inside the brain. But that's because the word 'experience' is used in different senses.