I also agree that with a relatively free form power like that, it is perfectly reasonable to give Conditions, Tilts and modifiers depending on the exact hallucinations inflicted. The Distracted Condition when the character believes themselves to be crawling with bugs, Arm Wrack when they "feel" their arms slowly dissolving, requiring Willpower expenditure or a Breaking Point to shoot the enemy they perceive to be their Touchstone, and so on and so on. Remember, even if the players know these things are not real, the player characters do not or even if they know, Nightmare works on a...