This is how I see it (please no personal offense intended!):
All there is, is it. There's nothing but it. And it is pure existence-consciousness-bliss (Sat Chit Ananda). This consciousness brings forward in itself a plane of duality, from which (the illusion of) form comes into being.
Sri Aurobindo explained thoroughly these different planes and their functionings and how the (illusion of) form is created.
It is an old debate if you wanna call this form world (Maya) illusion or not. In the end IMHO it is a typical feature of the ego-mind to make such distinctions. The mind always tries to separate, analyze and categorize.
You can see it from both sides: As this duality plane is part and parcel of the all, it is also real. OTOH you can see it from the perspective as you described and see it as unreal.
It's just how you want to define reality.
In the end does it matter?
The same applies if you define the ego as real or not.
In the end what is IMHO important is, to be happy.
The ego either likes to bloat you up and tell you, you are the best or trashes you and tell you, you are the worst.
From an evolutionary POV the ego is needed to judge made decisions. Modern science is actually quite far into the knowledge how the ego works. E.g. the ego itself can not act in any way (this is known today), but it identifies itself with the acting and judges it and can so by an (emotional) feedback loop influence future actions.
Sure this is all again seen from this form perspective. Which you can define real or not.
But IMHO just defining the ego as not real, with a mental logical construction but not experiencing it, is not of any avail, as you still sometimes suffer, worry and are not happy, because you do identify yourself with your (illusion of) body (you still identify yourself with this ego)
That's why people meditate. Sure you can have this mental belief, which is even true from a higher perspective, but that doesn't free you from your ego identification on this plane of consciousness.
Meditation is basically how to silence the mind (ego), to actually realize and experience this and not only believing in the mental construct of it.
But as said, you can always see it from both sides. And I would never say one side is the truth and the other not. It's all just perspective.
I just wanted to show, that one can see it from different viewpoints. And IMHO it doesn't really make too much sense to categorize and judge such mind understandings in any way.
As if you experience the one, you realize that this is all just a big laugh.
What I also did get from my personal first experience of the one was, that the mind on this plane, will never be able to "understand" it, whereas while you experience it, everything is so obviously clear.
I claim not that this is the truth. As this is just what got manifested into my mind at the current position in time on this physical plane. So please feel not offended by anything I say.