This is very much a thing. I've actually had dreams exploring this idea recently as it relates to drawing.

My wife in particular was exceptionally good at imposing visualizations onto her environment when she was younger--projecting a television that she could watch onto walls whenever she was bored. I was skeptical, so I grilled her pretty thoroughly about this, but she maintains that the level of visualization was very realistic.

Only recently after improving my own visualization (I was pretty shit at it most my life, but as sivason has shown it is a skill that can be learned) can I understand how what she saw and did was possible.