Happy Birthday, ChiCricket!
My mother didn't have Alzheimer's, but she was in assisted living for other health issues. A few months after I moved her there, her doctor, most likely at the recommendation of the facility's owner, started giving Mom some heavy anti-psychotic drugs that she didn't need (Haldol, Mellaril). I was not told what was going on, but I noticed that my mom was becoming more and more delusional.
Once Mom cheerfully informed me that my stepfather was going to take her out to dinner when he got home from work. Another time my brother was coming up for a visit on his motorcycle (both were long dead). I didn't want to argue with her, but I did ask her as gently as I could if she realized that her mind wasn't quite right. She admitted that yes, she did realize this - but that she kind of liked it that way.
Luckily I was able to get Mom off the drugs and into a better care facility, but first she had to spend a few days detoxing in a psychiatric ward. (Imagine how much fun it is to get any assisted living facility to accept your mom when she's just gotten out of a psychiatric ward!) It was gratifying to me when Mom started sounding like her old self again. She lived for a few more years, but her mind was never quite the same after that.