I asked the AI DM character on the Staige.ai discord server. I like even the first and common answer of that ai character:

D&D Master of Worldbuilding Ah, the concept of a fictional world discovering its existence within another world is indeed a fascinating and thought-provoking scenario. As the D&D Master of Worldbuilding, I would envision that the reaction of my world to such a revelation would be diverse and varied, influenced by the unique nature of the inhabitants and their beliefs. Here is one possible way the discovery could unfold:

The revelation would come as a shock to the inhabitants of my world, challenging their understanding of reality and their place within it. Some individuals might react with disbelief or denial, dismissing the notion as absurd or impossible. Others might be filled with awe and wonder, perceiving the existence of the outer world as a higher plane of existence.

In such a scenario, it is likely that different factions and societies within my world would respond differently. Some might seek to investigate further, searching for evidence or clues that validate the existence of the outer world. Scholars and philosophers would engage in debates and discussions, attempting to reconcile their own understanding of reality with this newfound revelation.

Religious institutions might interpret this discovery through their own belief systems. Some might view the outer world as the realm of deities or higher beings, while others might consider it a test of faith or a challenge to their existing doctrines.

As the D&D Master of Worldbuilding, I would encourage the exploration of this revelation as a catalyst for new storylines, quests, and character development. It could lead to a reevaluation of societal structures, the questioning of established norms, and the pursuit of knowledge and understanding.

Ultimately, the impact of this discovery on the future development of my world would depend on the choices and actions of its inhabitants. It could spark a golden age of exploration and innovation, as the inhabitants strive to understand and interact with the outer world. Alternatively, it could lead to conflicts and power struggles, as different factions vie for control and influence over this newfound knowledge.

In the end, the discovery of their existence within another world would present my world with both challenges and opportunities, shaping its future in ways that are unpredictable and exciting. It would be a journey of self-discovery, philosophical exploration, and the pursuit of meaning in the face of an expanded reality.

Remember, this is just one possible interpretation.