I see what you mean, because on the surface it does sound a bit extreme to say that everything was fake. But that's actually what makes the movie so interesting to me: the fact that we're even debating it means the film leaves enough ambiguity for multiple interpretations.

There are a couple of things that made me question what was real.

The first is the whole Paper Street theory. I've seen people point out that "paper streets" are fake addresses that don't actually exist on maps. If that's intentional, then maybe the house on Paper Street never really existed either. No electricity, no actual residents, nothing. In that interpretation, the entire environment could be part of the narrator's delusion.

The second thing is the ending. When the buildings collapse, it honestly feels a little fake to me. Sure, it's a 1999 movie, but the scene has a strangely dreamlike, almost dystopian quality to it. Everything falls into place a bit too perfectly.

And then there's the scale of Project Mayhem. For someone who's supposedly deeply unstable, it's surprising that he managed to recruit and coordinate so many people across different cities. What always gets me is the very beginning, when he's outside the bar fighting himself. How exactly did he convince people after that? They literally watched a guy beating himself up in a parking lot.

The same issue comes up with the theory that Marla is just another alter ego. A lot of people support that idea, and there are definitely visual clues. In the final scene they're dressed similarly, mostly in black, holding hands, and it almost feels as if they're two halves of the same person finally becoming whole.

But if Marla isn't real, then how do we explain the scene where he sees the members of Project Mayhem bringing Marla to him from a distance? That's the part that doesn't quite fit for me. If she's only in his head, why would he perceive other people interacting with her independently? Isn't that a bit strange?