In the episode she tells Willow that when she first saw a vamp, she freaked out, told her parents and they put her in a clinic.
Yeah, it does lend itself to the idea that she still is in the clinic, and that the Buffyverse is just in her head, but nonetheless, I think writing in that she actually was in a clinic, when it goes against what had occurred on the show in the past, just for the sake of one episode was weak.
You're looking way too much into this.
The Geek Trio put the spell on her, so it was just all in her head. She was "crazy."