I think it's more like MissingNO happening as it infects reality around those who see it. Others start to show signs of being Lamy. The person exposed to it starts to question if they are becoming (or if the others are becoming as well) As they're becoming glitched out.
Put their wallet in their left pocket. Then reach for it and it's in their right. Things get weirder and weirder until things start to become constants.
The person's mental state continues to deteriorate. Only things that seem static are 'real' the fact they've lost weight and height seems impossible at first but those things are constants in a world where when looking in the mirror their shower curtain changes at least twice (both in style and position) Where more things seem to be glitching out.
Keep seeing the Blue Woman glitching into reality over a people at times. Things seem stable enough to have 'normal' life. Cars are in the same place on the road even if the one ahead of them is now randomly changing colors.
Reality continues to decay for them until more constants happen to them wearing panties and a dress, getting big fat tits, pointy ears and all the things that the Blue Woman has, even their face glitching out to become hers for a bit
Then one day. Everything is static once more. Normality is restored.
Although why would Lamy ever think that reality was glitching out. Maybe she just got too drunk last night!!