I imagine it becomes quite a different play when the entire plot is presented as a purposefully constructed fiction

West Yorkshire Playhouse did a production in the early 90s, and it worked pretty effectively, in that having the overt frame meant that they didn't do what a lot of other productions seem to feel obliged to, and frame the action within the play as "we don't really mean it" - in context, everything absolutely was meant. I do remember at the end the entire audience practically spitting with rage wanting to shout "Don't do it, Kate!".