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Let me guess: machines will be able to provide for use while we're plugged into the Matrix, right? Each according to his needs?

No, not each according to his needs. Each according to their wants. Beach side mansions may be limited in this world but they're not in VR. In VR everyone could have a beach side mansion - they could have their own planet if they want. You may not be able to go paragliding or mountain climbing in this world for whatever reason but you could do that whenever you wanted in VR.

If you're living in fully immersive and completely realistic VR, you don't need any physical possessions. You don't even need your body - just your brain. There have been numerous experiments over the last 150 years were severed heasd have been kept alive with a simple pump to feed the brain with the necessary fluids. So, why waste resources maintaining an obsolete body when you can just maintain the brain and fit it with a BCI?

Who maintains the brains? Where do those resources come from?

Machines obviously. Where do those resources come from? Machines obviously. Now, those machines could be AI controlled or they could be controlled directly by the brains with the BCIs. This has already been demonstrated as possible with people controlling telepresence robots over the Internet with just their thoughts.

So machines would harvest the scarce resources necessary to keep people alive. Who controls the machines that produce the other machines?

What scarce resources would they be? Scarce doesn't mean limited - it means that supply is limited in relation to demand. What resources does a brain need to survive and what resources would be required to maintain the equipment? You making assumptions that these things are scarce doesn't make them scarce. Especially when you factor in all the freed up resources from no longer having to produce commodity goods and provide physical services.

If AI can control machines and people can control machines with their thoughts using BCI, then why would it matter what those machines are designed to do? Both AI and people using BCIs could control them regardless of their functionality.

Look at it this way. You remove a brain and stick it in a plug and play maintenance tank. The tank contains a BCI, backup power and backup reservoir. This tank then plugs into a skyscraper. The skyscraper provides a fluid reservoir and pump system to feed the necessary fluid to the brain. It also provides access to enhanced computational and communication technologies. How many brains could you fit in such a skyscraper and what type of maintenance would be required to keep this system functional?

You are writing a horror story right?

Sadly, I don't think you are. I fully acknowledge the ability of VR to replace reality (hell, our dreams prove that) but there is no reason to contemplate severed heads to make that happen.

Don't get locked into the scarcity mindset of @anarcho-andrei. Consider that AI and BCI will enable us to increase production, including by moving it off world, such that we can augment the native ecosystems of the Earth, rather than depleting them, as we have up to now.

Better management will produce better results. Remember your first boss? Do you think the best minds extant could do a better job managing than they did? That's the kind of qualitative leap that we can expect - the very best minds, not whoever inherited the money, or stole it from crack dealers with a shotgun, to buy the business.

As an aside, one of my formative memories is of my first boss yanking out his crank and pissing all over his shoes as we walked across a parking lot where he was going to show me how to fix plugged chemical toilets. You can hardly imagine my horror at the prospect, given his crude manners.

I, for one, will welcome our robot overlords, when they deign to free us from our own ignorance and prejudice.

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