The usual Chinese expression to describe the mushroom hallucinations is 见小人 (jiàn xiǎo rén), literally “see tiny people.”

Usually there isn't a second 人 (rén) being reduplicated here.

人人 does mean “everyone,” but that's a different construction, and Chinese noun reduplication isn't generally equivalent to adding Spanish -ito. You may also see 小人儿 (xiǎo rénr), where 儿 is a colloquial/diminutive suffix.

Are you sure? I thought that's what "xiǎo" was doing here, with "rén" being repeated meaning "everyone".