Seems a little bit weird to call this "Reality" - the word "Virtual" is not incidental the meaning of the phrase "Virtual Reality", taking it away completely reverses the meaning. It's almost like this is an April Fool's joke.
Branding doesn't need to be literal, just evocative. The word reality is often mentioned in trippy or philosophical contexts, which is the connotation that the term "virtual reality" is trying to evoke. The brand strategy didn't work for you, but I don't think it's a particularly unreasonable one, and I think plenty of people will tap into the connotations they were going for.
