Lost in fantasies regularly, abstracted at first (2,3)
I believe the answer is:
at sea
'lost' is the definition.
(both can mean confused or in trouble)
'fantasies regularly abstracted at first' is the wordplay.
'regularly' means one should take alternating letters (regularly take one letter, leave next etc.).
'at first' says to take the initial letters.
The initial letter of 'abstracted' is 'a'.
The alternate letters of 'fantasies' are 'atse'.
'atse'+'a'='AT SEA'
'in' is the link.
(Other definitions for at sea that I've seen before include "Not knowing whether you're coming or going" , "Worse things can happen here" , "on a boat?" , "Away from land" , "sailing the Atlantic?" .)