Just leave it on the table? Mom made an Easter card and a gift of popcorn for an imaginary man and left it on dining table.

Eat the popcorn.

Remember she is not living in the same world as you. She has dementia and believes what she thinks. Just go with it what does it hurt? Let her make the card, popcorn and leave it. She may forget about it as she turns the corner. My daddy thought I was at his wedding in 1959 and I was born in 1964. Did it really matter - I had a great time daddy you were handsome in your army uniform and mama looked great in her dress - next subject - no argument - peace.

Distract and redirect. Ignore. Walk away without explanation.

I am glad to hear of this move.
Yes, this sounds like dementia, for sure. I would not play into this, either, given she has given it a bit of a personal "twist" about you. Just tell her she is mistaken and no such man exists if she continues.