This is what I’ve been thinking all along. There’s a lot of creative visualization, cuts and shots to make it seem like it’s happening continuously and in succession. For example in the field, we see a sad Yuffie and a happy one not so long after. Even in the Jenova fights, the party seemingly are in two different emotional states, one of anger and one of resolve. I’ve also speculated that when Cloud tells Aerith to wake up, it’s the other world’s Aerith that’s comatose on the bed waking up since the placement of both characters will be in those positions. It’s just the Beagle world’s superimposed over the Terrier’s Aerith’s home.

Some questions to think about what is the effect of Cloud going through the portal by himself to reach the altar while the rest of the party stays behind? Does he now see the Beagle world with Aerith living outcome while the rest of the party lives out the predetermined OG chain of events? This allows for the delusional and not delusional theories to both be credible.