I can’t speak to tQY, but Microscope has scenes at its smallest building block, which most definitely does have mind theater at Ralph Mazza described.

Larps I can see being absent of a shared visualized experience, as you said, it’s right there in front of you, but even then, there may be something internally going on to help you suspend disbelief and see that foam sword as a real sword.

I’m not sure of any game where it’s escaped; reduced, even significantly, sure…