Regarding the problem of being and non-being, it is not said that the world does not exist, but rather that the being of the world does not have existence.
To grasp the distinction, it is necessary to comprehend a basic concept of Chabad Chasidism, that of the "nullification of existence."
This does not mean a repudiation of one's reality, which, even on a much higher level, is unacceptable.
The nullification of reality or of existence relates to the way one sees oneself, to the repudiation of oneself as an independent entity not dependent on God.
In fact, the whole problem of being and nonbeing should not be viewed in terms of existence or reality.
There is no leveling out or repudiation of that which is, but rather a repudiation of the being or nonbeing of desire.
The world, in other words, is not "Maya" or an illusion in the Oriental sense.
It is simply that what one sees as world is a product of incorrect seeing.
Were one able to perceive it differently, not through the physical senses, an entirely different world would be grasped, a world on a higher level, as Divine speech.
Because the relations between things in the world are the relations between the letters of the utterance in all their derivative forms and images.
It is in this sense that the world can be considered as nothing and of no substance.
What, then, is "nothing and of no substance"?
Actually, it is a material image that the mind of man considers as fundamental.
We start with the basis that things are or are not.
And even if something is in the category of not being, it is seen as an accretion to the fundamental reality of material being.
Because perception is of the eyes of the flesh and sees material objects.
—Rabbi Adin Steinsaltz
From “The Nullification of Reality” in The Sustaining Utterance by Rabbi Adin Steinsaltz