What does "living inside your own head" mean in this paragraph?

Can you explain for me the expression "living inside your own head" in this paragraph?

The practice of living in the moment while being aware of reality is a good and natural state of mind, but being self-conscious, living inside your own head while being excessively conscious of your appearance or manner, is a bad and unnatural side effect of your socialization. It is the result of having heard too many comments that you should “think about what other people would think of you” and having seen your own face too many times in manmade mirrors

Being inside one's own head is a general metaphor for introspection, "reflective looking inward", as well as for over-thinking or over-analyzing something.

It is being used in your passage to mean self-consciousness, in the sense of

feeling undue awareness of oneself, one's appearance, or one's actions.

The writer is warning people that being too conscious of (or over-thinking) their appearance and manner is a side affect of socialization.

In fact, the writer uses "self-conscious" just before they introduce this idiom and "excessively conscious of your appearance" right after.

See this related post on "get out of your own head".