Is there a narrative reason why Majora's Mask reuses so many art assets?

The Legend of Zelda: Majora's Mask reuses many art assets (including NPC models) from Ocarina of Time. Is any narrative explanation ever given for this? For example, is the game a dream or an alternate dimension or anything like that, which would explain why the same person has a different name in the sequel?

To clarify: I understand that in the "real world", this was done to speed up development. I'm just trying to remember if they ever tried to explain it away within the narrative.

I found a quote from Zelda Wiki about reasons for reusing assets:

Eiji Aonuma, a key developer of the game, had stated that reusing many aspects of Ocarina of Time allowed his team to program the game in less than two years (as Ocarina of Time took no less than four years of development).

But that again doesn't provide any "in-universe" explanation.

The Legend of Zelda: Majora's Mask is a direct sequel to The Legend of Zelda: Ocarina of Time. And according to the official timeline, it takes place on the child Link timeline.

At the end of Ocarina of Time, Link is sent back to his childhood by Zelda, acting as one of the seven sages. Thus creating the child and adult timeline branches. Majora's Mask takes place very shortly after the end of Ocarina of Time, and the Link in Majora's Mask is precisely the same Link in Ocarina of Time; the Hero of Time.

The key difference here is the setting. Link finds himself in Termina, which is not Hyrule. And given that Link fell through a tree to get there, it seems impossible that Termina and Hyrule are the same world.

The original Majora's Mask game manual appears to confirm this, and more (emphasis mine):

[Termina] is a kind of parallel world that is similar to, and yet different from the land of Hyrule.... Termina is a mysterious place, and the people Link meets here may look vaguely familiar at first glance

Hyrule Historia says about as much about Termina:

Termina: A strange parallel world, where many of the inhabitants look identical to the people of Hyrule (Hyrule Historia, p 111)

This is the closest thing to any official explanation comes as to where Termina is. It suggests that Termina is some sort of parallel world, and confirms our suspicions that the people here look familiar. It offers no real explanation as to why the people look familiar (other than the fact that Termina is parallel to Hyrule), and there is no official in-universe explanation as such per se.

On the "Link is Dead" theory

There is a theory that Termina is a sort of purgatory, and that Link is actually dead all throughout Majora's Mask. And indeed there is a good amount of dialogue, particularly from the Happy Mask Salesman, that seems to support this theory. However, there is no hard evidence that supports this theory.

Parallel worlds are not a foreign concept to the Zelda universe. In A Link to the Past and A Link Between Worlds, our hero travels between the Light World and the Dark World, Hyrule and Lorule. The Dark World is a near exact clone of the Light World, so it's not that far fetched that the Hero of Time has found himself in a parallel world.

Furthermore, fall damage is a consistent element of Zelda games, but also consistently deals around 1 heart of damage at most. Furthermore, in Majora's Mask, if Link lands on a Deku Flower (which he does at the end of the falling scene in the opening), all fall damage is negated. So the idea that a long fall necessitates death isn't necessarily the case.

Hyrule Historia offers some strong evidence against this theory. Let's go to Twilight Princess to find where it is.

Hyrule Historia says that the Hero's Shade is the spirit of the Hero of Time, of whom, the Hero of Twilight is a descendant. (point of order: the Hero's Shade is not a Stalfos) Furthermore, it identifies that this is not a metaphorical descendence: (emphasis mine)

...Link, a young man from Ordon Village in whose veins flowed the blood of the Hero of Time. (Hyrule Historia, 115)

In-game dialogue from Twilight Princess further suggests that the Hero of Time and the Hero of Twilight are of the same blood line. Which implies that the young Hero of Time may have gone on on to have a family. None of this is explicitly stated, however, it is very strongly implied that the Hero of Time continues to live his life after Majora's Mask. While death is a recurring theme of Majora's Mask, there's no hard evidence that Link, himself, is dead throughout Majora's Mask.

There is no one reason that was ever given why this has occurred, however there are a few theories about this.

The main one that stands out is that Link is actually dead/dying. The events of Majora's Mask are actually in a sort of limbo/purgatory environment. Hence why he is remembering all of these things in his delusion, as deaths cold embrace takes him...

Hey, explains why everyone else is dead and dying. It's a way for Link to come to accept his own death.

Another theory, though probably not as well known or accepted is that Link has wandered into the Lost Woods. Without Navi, he has lost his way and begun to go slightly mad. Why he has gone mad? Magic? He's been lost for a lot longer than we could perceive? Who knows.

Again, in his delusions, he is remembering things from his past, and placing them together in his mind.

So the one thing we can take away from this is that basically, (while this is never truly explained and we can only ever speculate) the world of Majora's Mask is a delusion, constructed in Link's mind.

EDIT: Some key points to support the Dead Link theory are:

• The fall to reach Termina (which is inside a tree) doesn't make physical sense. Link fell a long way, only to end up... back outside?
• The characters that you gain the transformation masks from are either dead/dying.
• The "Elegy of Emptiness" allows Link to create statues of the (dead) Characters he transforms into... including himself.

As for the "Lost in the Woods" theory,

• The Skull Kid was originally found in the Lost Woods, which the wiki states

  A Skull Kid is what a child becomes after getting lost in the Lost Woods. They appear in Ocarina of Time, Majora's Mask, and Twilight Princess. One first interacts with Link in Ocarina of Time, and later plays a major role in Majora's Mask.

• As Link is not a Kokiri child, he is actually susceptible to the effects of the Lost Woods.

• Additionally, further down the official timeline in Twilight Princess you meet with a Stalfos claiming to be the Hero of Time. While a Skull Kid is the outcome of a child being lost in the Lost Woods, a Stalfos is what adult turns into when lost in the Lost Woods:

  "That guy isn't here anymore. Anybody who comes into the forest will be lost. Everybody will become a Stalfos. Everybody, Stalfos." — Fado (Ocarina of Time)

  "Adults lost among the trees turn into Stalfos, while children turn into Skull Kids; both are doomed to wander the woods." (Hyrule Historia (Dark Horse Books), pg. 84)