Having them see themselves in an alternate reality smacks of fringe to me. It's almost as if they are all in heaven/hell after dying in the war.....unless that's what's going on
I removed the spoiler tags because a) it's US section and the show already aired b) you're not spoiling the plot, you are speculating. I hope you don't mind
From what I remember the source material ie. the book doesn't really provide any answers. Philip K. Dick wanted to write sequel to the MITHC until the end of his life, started several times and given up or converted the chapters to something else, even tried to find co-author at some point. Overbearing psychological pressure while researching Nazi related material was quoted as one of the reasons.
IIRC Dick's alternative universe of MITHC goes much further than its TV depiction - the surge of technology created by the war leads to accelerated progress in space exploration and colonisation of the planets. The alternative universe reality revealed to the protagonists in form of a story within story is actually equally grim as the in-book-reality. It's a universe where the common enemy of world democracy - the expansive Soviet communism - never happens. Mao loses in China leading to extreme right wing forces ruling the country. Colonial, imperial UK is in the state of the cold war with US over world domination. Time/space continuum warp machine (to explore alternative timelines) is a distinct technological possibility in the near to the story future and was considered as one of of the sequel plot points. It is very much Fringe but without a glimpse of hope - without an anchor point in the "good", correct, reality "reality". As usual with Dick - it's a choice between grim and terrible. The light in the tunnel is a freight train fast approaching your way.
