I wouldn’t say his fabric of reality has “no connection to the real world” - it all starts at the system of values. Putin is similar to us and he speaks in a similar terms, which is confusing for us Europeans.
So it’s easier to use an example from an entirely alien culture - take ISIS with their “as much as you value life, we value death”. They did truly terrible things with themselves and their prisoners to demonstrate to the West that this is actually the case and the values they believe in. West somehow, reluctantly, accepted this. I mean not their values, but the fact that there exists a movement with values so shockingly different that it can’t be mediated with. ISIS could be only isolated or destroyed.
But with Putinism it’s the same thing really - Russians have been demonstrating for decades that the well-being of their own people has little value for them, what does matter is the imperial euphoria and feeling of “being respected”. All these decades we were telling ourselves - and them too “no, you’re just saying that, but deep in your soul you want peace and welfare state”.
But what Putin does is not entirely detached from reality - quite the opposite, he consistently executed a plan to establish the reality he wanted, which included fast paced growing of Russian army, state repression apparatus, censorship and energy blackmail leverages on EU countries.
We happily excused all these, while actively denying the reality that Putin’s actions are 100% consistent with his offensive plan.
Putin indeed did some mistakes which can be described as detached from reality, for example assuming Ukraine will surrender in a week, that majority of Ukrainians will welcome Russians and that EU/NATO won’t help at all.
Cognitive bias was present on both sides, but it’s not unusual - Soviets in 1940-1941 denied any possibility that Germany is preparing to attack USSR in spite of overwhelming evidence that it was their plan.