Which term describes the virtual reality technology that allows users to interact with 3D environments?

The term that best describes the technology enabling users to interact with 3D environments is virtual reality. This technology immerses users in a completely digital environment where they can manipulate and navigate through the space in a way that mimics real-world interactions. It employs specialized hardware, such as headsets and motion controllers, to provide sensory feedback and create an engaging experience.

Augmented Reality enhances the real world by overlaying digital information onto it, rather than creating a fully immersive environment. Simulation typically refers to replicating real-world processes or systems for training or analysis but does not necessarily imply interactivity within a 3D environment. Mixed Reality combines elements of both augmented and virtual realities, allowing for interactions between real and digital objects, but the term specifically tied to fully immersive experiences is virtual reality. Thus, the most accurate term for the technology described in the question is virtual reality.