lol, so much confusion from people
1. everything up to breaking his legs and Ranze (the imouto) leaving the phone wit him is real.
2. he had a dream (with Banri, the orc) which turned into a nightmare (with Fuhra, our totally not yandere fairy)
3. he woke and Fuhra revealed she has power over dreams and sleep.
I'm guessing Fuhra can read dreams, saw him horny over Banri, and decided to "play a prank". "graduation" in this case is less about growing as a man and more about learning the ways of women (a totally not yandere woman who is very loving).
Sorry, MC still has his (straight) virginity.