What is the meaning of the term "Suspension of Disbelief" and where does it most commonly apply?

The "Suspension of Disbelief" can apply to books, film, television shows, plays and stage or radio productions.
The "Suspension of Disbelief" is when one becomes emotionally invested in a story, and feel for, or empathize with people who don't exist and believe the events in the story are taking place or have taken place when they haven't. More simply, it's when one has been "drawn in" by a story.

Suspension of disbelief refers to the willingness of a reader or viewer to accept the premises of a work of fiction, even if they are fantastic or impossible. It also refers to the willingness of the audience to overlook the limitations of a medium, so that these do not interfere with the illusion. However, suspension of disbelief is a do ut des: the audience agrees to provisionally suspend their judgment in exchange for the promise of entertainment.

Inconsistencies or plot holes that violate the initial premises, established canon, or common sense, are often viewed as breaking this agreement. For particularly loyal fans, these 'dealbreakers' are usually accompanied by a sense of betrayal.

https://psychology.fandom.com/wiki/Suspension_of_disbelief