[More thorough definition/​description in Prereq: Cognitive Fusion and Kaj Sotala’s attempt to explain Looking, insight meditation, and enlightenment in non-mysterious terms]

From the latter:

Cognitive fusion is a term from Acceptance and Commitment Therapy (ACT), which refers to a person “fusing together” with the content of a thought or emotion, so that the content is experienced as an objective fact about the world rather than as a mental construct. The most obvious example of this might be if you get really upset with someone else and become convinced that something was all their fault (even if you had actually done something blameworthy too).
In this example, your anger isn’t letting you see clearly, and you can’t step back from your anger to question it, because you have become “fused together” with it and experience everything in terms of the anger’s internal logic.

In this example, your anger isn’t letting you see clearly, and you can’t step back from your anger to question it, because you have become “fused together” with it and experience everything in terms of the anger’s internal logic.

Another emotional example might be feelings of shame, where it’s easy to experience yourself as a horrible person and feel that this is the literal truth, rather than being just an emotional interpretation.

Cognitive fusion isn’t necessarily a bad thing. If you suddenly notice a car driving towards you at a high speed, you don’t want to get stuck pondering about how the feeling of danger is actually a mental construct produced by your brain. You want to get out of the way as fast as possible, with minimal mental clutter interfering with your actions. Likewise, if you are doing programming or math, you want to become at least partially fused together with your understanding of the domain, taking its axioms as objective facts so that you can focus on figuring out how to work with those axioms and get your desired results.