I don't know much about standard ethical frameworks used in these kinds of experiments, but giving hallucinogens with unknown long term health effects to participants feels somewhat unethical to me.

Also, to get stronger results you would probably want to conduct the experiment on participants who don't have an expectation of seeing little people, so that rules out locals or people who heard of or eaten the mushroom before.

Everything's unethical that seems kinda weird or icky to middle aged HR schoolmarm Karens who like to sit on committees and wiggle their fingers and clutch their pearls, like the good church ladies they are, at the naughty boys.