You could say that they're actually living in a fake world, but that's obviously meaningless because of course they are, it's fiction. And diegetically it doesn't really change a thing that they live in a Donnie Darko style tangent world, so much so I'm not even gonna spoiler tag this comment.
I wouldn't even know how to go about spoiling Twin Peaks honestly.
You could say that they're actually living in a fake world, but that's obviously meaningless because of course they are, it's fiction. And diegetically it doesn't really change a thing that they live in a Donnie Darko style tangent world, so much so I'm not even gonna spoiler tag this comment.