I based it on the fundamentals behind genjutsu. IT at the very basic core, works almost the same way as all genjutsu does. They:
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- If you noticed, one way or another, people who got caught in genjutsu are aware that they are stuck in it. In this case, they are aware they'll get caught after seeing the moon.
Nothing suggest that IT works otherwise. I.e: Naruto and Sasuke's collaborative seal works almost exactly like the buddy system, which involves third-parties disruption genjutsu. IT's specialty is that:
- Cast moonlight all over the world.
- Almost everyone without power from an Ootsutsuki are permanently stuck once caught.
- Puts them in eternal sleep.
- That's all I can find.
People's minds are still active within that genjutsu; otherwise, dreams wouldn't play from them in great detail. Because where else do dreams come from anyway. That's why when they got off, they had an exhausted expressions on their faces. [
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]
Let's look at what IT really does. Madara never for one create a dream world for everyone like he
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. That is if anything an outright lie. People are actually isolated from each other [
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][
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]; plus we saw how IT really works when Kaguya cast it [
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]. He also
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this whole Rin shit. So I couldn't take much of what Madara said seriously.
To have people together in the same world, they have to be in some way mentally connected. IT isn't a dream world at all by definition. Only thing united is that they're all stuck under one tree and one big giant-ass rock light.
Edit: To really answer your question. People are someway aware that they are under IT. Just like how it was every time one gets caught under genjutsu. Difference is like I mentioned, IT basically forces those dreams to be played. But it doesn't take away their awareness, which suggest that they wanted out.