I know two women, who do this repeatedly, on a smaller but more insidious scale.
Conversations with them involve exaggerated and made up conversations they've had.
Eg they may say "carol said she hates her mother"
You think 'gosh carol never gave me that impression'
Or, something like "fionas husband is very controlling'
You think 'gosh he seems so nice'
Or 'susie said i should help out more with the pfa'
You think 'gosh that's outrageous i didn't realise Susie was like that.
Or 'DD's teacher said DD was her favourite pupil'
You think 'gosh how lovely for you to hear that bit unprofessional though.'
It then very gradually dawns on you that what they are repeating as factual events, are actually just the thoughts in their head and they seem to lack the filter between reality and their feelings/thoughts.
They pretend to know people very well and be in their confidence, and you then discover the other person barely knows who they are.
They like to be 'in the know' about everything, so confidently offer information on all sorts giving the impression they have been told this directly. Anything you may know, they know already, nod smugly and provide additional flimsy information.
As I say Ive met two women like this in the past ten years, it's taken me a while to suss it and I've found it hard to comprehend.
It's different from exaggerating a funny story, it's more subtle, and more insidious.
Anyone else met these types?