When I was little I had an imaginary friend who was a mean tall man who sometimes dressed like Barney to try and make me play with him, but he was very mean and cruel. Then one day I got a second imaginary friend the "pretty lady" who helped me kill the first one, and then she ate his body.
According to the new ending by defeating the beast, the Isaac that dies in the game is implied to not be the real Isaac. The real Isaac could be illustrating the stories for his dad to tell him, and you play those adventures.