It's funny, from our point of view, there's a similar point in your approach where the imaginary suddenly becomes real.
So let me tackle that.
And yeah, I do agree that in some cases there's no difference between simulation and emulation. In fact, I can describe those cases, I think: it's when no real work needs to be done by the physical system during that portion of the chain (except what might be coincidentally done by the original part and the replacement, such as output of random heat) and when the implementation of the hardware doesn't hinder the functioning of other subsystems.
And the necessary fallout from this is that simulations cannot also be emulations -- or in my lingo, representations cannot also be replicas -- at any point where the system does any real work that the replacement can't also perform.
That's why a representation (including a computer simulation) of a kidney can never replace the entire kidney -- it can't do the phsyical work. You have to have an actual dialysis machine for that.
That's why Pinocchio can never be a boy as long as he's made out of wood -- it can't do the physical work that a human body does.
Or we can imagine Major Tom in a space suit, out repairing a space probe.
Let's say he can either use his jet pack to float back to his ship, or he can teleport like in Star Trek.
We'll ignore the problematic bits and just stipulate that he can be Wonkavisioned through space with the relative position and type of his particles preserved in the transfer of photons or whatever, and reassembled from that configuration into a corresponding collection of massive particles, a man in a spacesuit.
Now let's imagine that on this day Tom spots a space squid between him and the mother ship. A small one, but big enough to break something important, so he decides to kill it on his way back.
If David back on the ship teleports him, he can't kill the space squid.
But why not? The teleportation is real, the inputs match the outputs... but it's like I said, there is some real work to be done at that point in the chain which cannot be performed by the physical choice we've made for Tom's transportation (whatever it is) unless it kills anything in its beam, which it probably doesn't because then it would be too dangerous to use.
We could even program the transporter to rearrange the information about Tom's physical state along the way, run it through the same transformations the physical Tom would go through if he had killed the squid.
He would emerge with the memory of using his jet pack to return, and killing the squid along the way. Then he'd look out the portal and see the damn thing still there!
Ok, so getting back to the brain example, if we get down to the level of one neuron, it's likely (but not certain) that there's a medium available which we can use as a replica. And if there's only one action that's important (e.g. a neuron fired or it didn't) then it's hard to describe that as also not a digital simulation.
But if we try to zoom out to the level of the brain, specifically a conscious brain, then we'd have to assume that there is no
physical work at all which is ever important in the functioning of the brain which will not also be produced coincidentally by a machine designed to run computer sims, if we are to believe that it could be replaced by a machine designed to run computer sims.
That's a tall order.
And it becomes an insurmountable one when we consider that consciousness is a phenomenon observable in spacetime, which makes it objectively real -- my body as a physical object is generating a conscious experience right now which is locatable in both time and space (i.e., it ain't happening tomorrow in Paris) -- and the laws of physics demand that all real phenomena require some sort of work.
Therefore we can conclude that a simulation/representation of a brain, rather than a replica of a brain, cannot generate a real instance of conscious awareness -- as happens, for instance, when a baby begins to exhibit that behavior -- because the physical work of the machine is too different from the physical work of a brain to make it happen.
So yes, the point of separation you're talking about is very real.