As stated, Dot went on a "Fantastic Journey", especially with respect to her interaction with Linda, seems to be an hallucination induced by sleep-deprivation, which was evidenced when she drifted to the shoulder of the road, before she entered the "greasy spoon" diner.
The reason why Dot's criminal background check raised a red flag when her [finger]prints were run after she was arrested in the first episode of the season, The Tragedy of the Commons (2023), and drew Sheriff Roy Tillman's interest, was due to the fact she engaged in petty crimes such as shoplifting when she was younger.
Dot's hospital room features a painting with a UFO in it, a reference to events in the shows second season.