any advice about how you describe something that can't be described, such as the thinning of reality, but in such a way that it can't be appreciated by the characters in the context.
The easy way out is to have a trusted third party. A therapist, a narrator, or even a historian trying to piece the puzzle together after the fact can bridge the reader and the experiences the characters are going through.
Beyond that you're simply talking about writing a book with an unreliable narrator, and there are many examples of that.
Maybe you should shuffle all your current thoughts away and approach the problem from a different perspective. Rather than focusing on "describe a place where reality is thin" focus on some other aspect or intended impact of the story.
Why do you want to explore such a place? Are you trying to induce a particular feeling or mode in the audience?
Why would such a place be important? Is it a place people want to get to or get out of? Is it important that the people inside it eventually become aware of it, or is this a "ignorance is bliss" situation for some characters?
Are there particular characters with traits that would flourish, or die, in such a place? Is it merely a strange racquetball court where you want to see how, exactly, the characters bounce around inside it?
Is there a barrier, or tunnel, or method to get from "reality" to this space and is that transition important? Or is it an imagined place, or a place that doesn't exist on the same plane, or is it the same place, but merely acting or reacting differently for each character?
Is the place itself a character? Do any of the characters experience a significant change?
Can such a place provide the characters with their desires and hopes, or alternately provide a waking stage for their nightmares to show up?
While stories about places can be interesting it's ultimately the characters that become compelling for the audience. When in doubt, focus on the characters.