Final answer:
The passage indicates that the mind is in a sad state when it cannot keep the elements of sleep, such as dreams, confined to the realm of sleep, affecting the individual's reality.
Step-by-step explanation:
According to the given passage, the unfortunate state of the mind pertains to the boundary between sleep and wakefulness. When the specters (dreams or thoughts) of sleep 'break forth', they cause distress to the conscious life of an individual, suggesting that the mind is in a sad state. Such experiences disturb the individual's perception of reality by introducing elements of the subconscious into the waking world. This is an involuntary crossing of experiences that should be confined to sleep into the realm of wakefulness, causing confusion and often distress. The correct answer to the given options would be that the mind is in a sad state when sleep's secrets are unconfined and merge into reality, affecting the individual's experience of what is real.