Basically it hyper-connects your brain. When people talk about seeing shapes, its not that they are hallucinating, its that when they look at the random fuzz pattern on a rug, and pick out the particles of fuzz that make a creature face, its looks like someone purposefully put those pieces there to make that face.

As such, if you are "surfing" thoughts and find an association of something, that association can become very prominent. If you don't have the context to understand why you are making that association, especially after the trip, you can get stuck with beliefs about yourself that could be non optimal.

On the flip side this hyperconnectivity also allows you to see things like a completely different person would see them, which is where the true healing power lies. Its like you can be disugsted with a particular food when you are sober, but on shrooms you can truly feel what it would be like to enjoy that food. Once you have that context, you are able to move forward after the trip into right directions.

This is why set and setting are EXTREMELY important for significant trips. You want to be with someone who a) has done psychedelics, b) is in a very good mental state, and c) has a low ego not to project their own personality onto you. The best trip sitters are those that encourage exploration - they take everything you communicate to them and ask you questions about it without imparting any bias.