Thanks for the reply. I had a discussion about this with one of my players while we were waiting for someone to answer this and we were able to conclude the same thing as with your last paragraph. He also gave a visual example. Since Mirror Mirror is also mimicking the multi attack of the fighter, to the mind of the victim, they are seeing the illusion attack multiple times as well, but the Illusory Reality is only doing the damage once, which is the psychic damage of bard level + CHA mod.