I like this. I think you can take this even further. If you define an “existing chair” as something that looks , feels, tastes— you know — like a chair, then no mather if the chair you’re sitting on is a hallucination or not, the chair exists. Even physically. In your mind maybe, as a combination of signals inside your brain, but it exists.
If you suddenly woke up from the computer simulation you’re living in, like Neo in The Matrix, would this mean that everything you’ve expirienced so far in your life simply doesn’t exists? I don’t think so. I think it doesn’t change a thing.
Then again, it’s all a matter of the definition of the word “existence”.