"If people reacted only to the truth, to the 'facts,' or to reality, then we would probably live in a perfect world where there is no failure or error."
Or perhaps we would be paralyzed, finding nothing to react to. Our experience could be (perhaps defensibly) said not to be objective truth, fact, or reality. From this perspective reacting only to reality would result in non-action, unless one compromised by accepting a sort of approximate quasi-reality.
Right. Although I would not say that our experience is completely false either, just as it is not completely truth, but a mixture between both. So, in fact, we are already reacting to a quasi-reality, just that the quasi-reality of some people is more subjective than that of others.
No one has the complete truth, and no one is completely wrong, just, somewhere in between.