How does the Dimensional Loop's Fold Space ability interact with areas of effect?

Question

The magic item Dimensional Loop (Acquisitions Incorporated, pg. 220) has an ability called Fold Space which says:

Choose a space you can see within 60 feet of you (no action required). You treat that space as if it were within 5 feet of you until the end of your turn. This allows you to move immediately to that space without provoking opportunity attacks, or to interact with objects or creatures in that space as though they were next to you (including allowing you to make melee attacks into that space).

Suppose Jim Darkmagic is having a dual with another mage, and they are 50 feet apart. The mage uses its action to hold a fireball spell until he sees Jim casting a spell. On Jim's turn, he uses the Fold Space ability of his Dimensional Loop and chooses the space the mage is occupying. Until the end of Jim's turn, the mage's space is treated as if it were within 5 feet of Jim. Next Jim starts casting inflict wounds on the mage. Seeing this, the mage uses his reaction to cast fireball centered directly on Jim.

Is the mage considered to be within the area of effect of his own fireball?

Similarly, does Jim need to be wary of casting his own fireball on the mage until next turn?

Answer 1

Rules as written, I’d say no to your first question, and no to your second. As you quote from the ability (emphasis mine):

You treat that space as if it were within 5 feet of you until the end of your turn.

In all spells and magic item effects, “you” refers to the caster of the spell or user of the item. So Jim treats the opposing wizard’s space as if it were within 5 feet of him, but the wizard casting fireball - and indeed the resulting fireball itself - does not.

In the inverse case, if Jim casts fireball on his turn and targets the opposing wizard’s space, he is still safe. Jim treats treat the space as if it is within 5 feet of him, but the space does not do the reverse - the wording of the ability means the effect only goes one way. The wizard in the opposing space cannot reach through and attack Jim, because the space does not also treat Jim as if Jim were 5 feet away.

Answer 2

The space is only 5 ft away for Jim

The specific exception created by Dimensional Loop's Fold Space only applies to the user of the loop (emphasis mine):

You treat that space as if it were within 5 feet of you until the end of your turn.

The additional clarifications also only apply to the user and not to the space in general. If it would apply the other way it would say something to the effect of "That space is treated as though it is within 5 ft. of you" and the clarifications should include a statement that creatures in that space can make melee attacks against you.

For the specific example, there is nothing saying that the mage is withing 30 ft. of Jim for the mage's fireball and so aren't affected by it. If Jim casts a fireball on the hand it would affect all spaces within 30 ft. from the mage from Jim's point of view.

This is a case of a magic item creating exceptions to general rules, which in this case also apparently includes relativity.