This paper is pretty interesting about how children perceive the world and struggle to distinguish between what they’ve imagined and what’s real. I started reading from the bottom of page 25, about the experiment where kids are asked to imagine a monster in a box, and whether its really there. They say “no”, but then often behave like maybe it is real.
The paper considers a few possible reasons children do this, but also points out that even adults do this! How many of us struggle to go to sleep after watching something disturbing or scary?