I think this is the best thought out argument for free will being a rational belief I have ever read. Thank you for this.

Dude check out phantom limb syndrome.

We are only free in our reason.

I would think it would qualify as a singularity event.

Allow me to restate the series of events you've laid out.

1.) We build neurotechnological interfaces which allow us to transfer our consciousness to machines.
2.) We build a super internet of interconnected minds in virtual reality.
3.) Our entire civilization becomes an otaku and refuses to leave its room.

Honestly...I can see this happening...