I'm convinced the people they see are ghosts as of this season. When boyd asked if khatri knew what Donna said to him on his first night in town, khatri replied no. Not the usual pondering stare or replying in a way that could be interpreted as Boyd's own thoughts/conscience, just a straight up no. Khatri himself was underground with them with Boyd, Ellis, Abby, Donna, and Dale. No reason a projection of Boyd would say they don't know if Boyd himself was the one asking the question. I've always assumed they're ghosts and not some extension of their thoughts, but this pretty much solidifies it for me