I also have had this at times. I think when we are somewhere in between sleep and waking it's like a filter gets removed and we can see things we'd rather not acknowledge when we're awake. Because for me it goes away after I fully wake up. But in the between state there's always the sense of absolute clarity about the world and yourself, and often it's not pretty or enjoyable. But it might also be necessary because these are the times when I'm most aware of things that need to change. I've just never been able to change things 100% to the point I'd be totally happy, whether because of personal weakness or simply that happiness is not fully attainable, I don't know.
Discussion
yes so when we're fully awake our brain blocks out everything except what we're focusing on, like on typing this message for example
when we are asleep it's just random background noise that doesn't sting because it's just a kaleidoscope of dreams and fears but we know it's not real
but somewhere in the middle there is this hell where the things on your mind are real but the filer than normally blocks them out is down
let's say you're a woman whose husband beats the crap out of you all the time so you're constantly covered in bruises but yet you refuse to leave him because your brain manages to compartmentalize your thoughts in such a way that you can somehow rationalize his behavior away long enough to block those thoughts and switch your attention to something else ...
then at this nasty time before waking up suddenly you just see things how they really are - how other people see you - that your REAL situation is worse than the worst nightmare ...
sure when you are awake you can rebuild the distractions and compartmentalization and go back to your denial ... but you know what you saw was not a dream ... it was reality ... and what you're living is a fantasy