Yeah, there is interesting stuff about linkages between psychotic/mood disorders and sleep hallucinations. I think sometimes sleep hallucinations are associated with the beginnings/onset of Sz, SzA, and other psychotic disorders. At least, some papers seem to suggest this.

At the same time, I think that some meds tend to give vivid dreams or nightmares, so I do wonder if perhaps the sleep-related hallucinations are also partly due to meds since meds affect sleep in so many different ways. Not sure, though. That's just a possibility that I randomly thought of.