According to the NY TIMES For the Brain, Remembering Is Like Reliving:

Experts said the study had all but closed the case: For the brain, remembering is a lot like doing (at least in the short term, as the research says nothing about more distant memories).

Which I think might get to the heart of the theatrical encounter – creating imaginary scenarios that stimulate memory of actual experience which creates the illusion or feeling of having actually participated in the imaginary scenario. It also might mean that if part of how art functions is to stimulate memory, then that stimulation doesn’t have to be realism, it can be any combination of sensory activators in any combination. Hmmmmm….