Nearly everything on a movie set is wildly fake. Imagination is required even for conventional acting. The whole job is "telling the truth under untruthful circumstances".
It can require a different toolset when it's just you and a blue screen, but in many ways it's the same craft that every actor develops anyway.
Villeneuve (Dune director) is amazed at the performances Cameron gets out of his actors with a green screen.
One thing he does is "sense memories": he took the cast hiking in maui, to concentrate on and memorize the smells and textures of the jungle - to re-experience when shooting.
Sense memory is one useful tool in the director's toolbox. Some actors don't like it, because what you're seeing is their memory rather than the character's memory. They feel that it creates inauthentic performances. I know that may sound silly, but a lot of acting technique sounds silly until you realize that they're trying to not just rely on their own habits. That's what leads to actors being accused of "playing themselves in every movie".
(It also leads to directors abusing that privilege, getting "real" emotions in highly negative situations. Like the way Shelley Duval was reportedly terrorized by Stanley Kubrik while shooting The Shining.)
The director has to assemble the team that they want, who will respond to the toolkit that they're using. In the end it doesn't matter what it takes, as long as you get the shot you want in the can. (And complying with ethics, a thing that has too often been ignored.) I'll sometimes even use the worst tool a director has, feeding actors line readings, though only when they ask and nothing else has worked.
They're not helped, but they're not hurt. They're used to delivering lines to empty space, even in conventional work. It's all of voice acting. Many performances are re-dubbed latter in a studio, where they have better control over the sound. Two-hander scenes are often done without both scene partners present; a stand-in is used for the over-the-shoulder shots, and their lines delivered by a production assistant off camera.
The point is that actors are used to imagining things. Ian McKellen didn't need an animatronic Balrog; he had no trouble delivering his lines to a tennis ball (which told him where his eyeline should point). It's all in a day's work for an actor.
It does put requirements on the director to visualize the scene for the actor. You can see that fail in Phantom Menace, where very talented actors deliver terrible performances not because of the blue screen but because they were given no direction. The director's job is always to convey what the actor needs to give the performance they want, and that can be nothing more than words.
Sorry, despite your nice exposition I still don't believe it. If you really think a blue screen doesn't negatively impact acting performance then it would require some kind of scientific experiment to convince me.
I'm not sure it's the kind of thing that really admits scientific evidence. By the metric of "dollars earned" or "jobs hired" actors of every different school of acting get jobs, and I doubt it makes a measurable difference at the box office.
It's an art so the techniques that work are the ones the artist chooses. I'm sure there are some who are happier with an animatronic and others who would just as soon scream at a production assistant on a ladder.
> By the same token, do you have scientific evidence that they’re helped by not having a blue screen?
Yes, it is clear that the person I'm replying to has more experience in this field; I'm just a "simple consumer" of movies. However, having experience can sometimes blind you from inconvenient facts. I think the burden is on the industry to prove that new technologies have no negative effect on the end product.
The effect on the viewer is more important than the actor. It's our job to make it interesting no matter what the circumstances. You are just supposed to enjoy it (enough to spend your money on it).
Audiences definitely like practicals, even when they aren't as realistic. People adore Baby Yoda even though it's obviously a puppet ... in fact because it's obviously a puppet.
They also react very positively to the Volume, which is so much better than blue screen even though it's just as fake to the actor. (They're usually not even looking that direction.)
It can require a different toolset when it's just you and a blue screen, but in many ways it's the same craft that every actor develops anyway.