Acharya Prashant explains that the visible world is a mental projection and lacks ultimate reality. He emphasizes that what is perceived is not the final truth, as there is something more significant beyond appearances. He clarifies that the world is not necessarily 'fake', but rather incomplete in its representation of reality. He discusses three levels of truth: the imaginary, the factual, and the ultimate. The speaker identifies the visible world as factual rather than ultimate, noting that the ultimate source is present in everything, whether it is perceived or not.