The disparity between the level of detail in reality/prior, and imprecision and mutability of psychological anticipation was an open problem for my attack at the problem which I made in autumn (and discussed previously here).

This problem is solved by identifying prior (notion of reality) not with explicit data given by psychological anticipation, but with normative anticipation. That is, reality is explained as that which we should expect, where the shouldness of expectation is not a line from Litany of Tarski, suggesting how one ought to keep an accurate map of reality, but literally explanation of what reality is.

The multi-level conceptual models that humans build are models of uncertainty, expressing logical uncertainty about the conclusions that should be drawn from past observations. There is only one level of reality in the same sense there is only one mathematical structure behind the many axiomatic definitions that specify it. Reality is, in a sense, what a Bayesian superintelligence would conclude given the knowledge and observations that humans have. But as with morality, we don't have that definition explicitly anywhere, and can only learn more and more detail, and as with morality, the notion is normative, so you can't solve any problems by changing the question ("where should I tweak my mind if I want to win the lottery").

A big question remaining is how do we learn from observations, in what sense do the observations confer knowledge, what is the difference between such knowledge and other kinds of knowledge. This requires facing some problems that UDT avoided by refusing to treat observations as knowledge.