The usual Chinese expression to describe the mushroom hallucinations is 见小人 (jiàn xiǎo rén), literally “see tiny people.”
Usually there isn't a second 人 (rén) being reduplicated here.
人人 does mean “everyone,” but that's a different construction, and Chinese noun reduplication isn't generally equivalent to adding Spanish -ito. You may also see 小人儿 (xiǎo rénr), where 儿 is a colloquial/diminutive suffix.
I would defer to a native speaker, but Chinese is extremely contextual, and even native speakers often can’t tell you the formal rules of usage for something like this. There’s a lot more listening to register and intuiting intent required than with English. The same phrase used in different way can have a different function. In this usage it does not sound like plural “people” to my ears.
You can say something like 「你看！可愛的狗狗」 and it’s “look! A cute doggy” (reduplicating 狗 gǒu). On the other hand you could say 「人人都知道她是小三！」 and it means “everybody knows that she’s (his) mistress!” (reduplicating 人 rén).
I think this first example is spot on. Though a sibling comment's Wikipedia link doesn't mention it, there is a diminutive or hypocorism use that I feel is best translated into English with the -y or -ie suffix.
狗狗 doggy
猫猫 kitty
鸟鸟 birdie
宝宝 baby
And it kind of works for verbs too:
看看 [take a] looky
