To be fair, the way Sarada awakened her Sharingan proves that awakening the Mangekyou Sharingan through Genjutsu could be possible. Sarada was under the impression that Sakura wasn't her real mother even though she was and it was all just in her head. I could also point out that Mangekyou Sharingan awakens during the death of a loved one because of the severity of the trauma and it is not the death alone that awakens it.
Sasuke was probably too young and couldn't handle the Mangekyou Sharingan which is why he didn't awaken it after death of his parents. Also reliving a traumatic event isn't as traumatic as the first time it happened which is why sasuke didn't awaken the Mangekyou Sharingan under Itachi's genjutsu.
In other words, awakening of Sharingan and so forth is caused the variation in trauma severity, not a death. The Mangekyou Sharingan would certainly awaken even if someone didn't die as long as the severity of that specific trauma is the same or exceeds the death of a loved one.
In conclusion awakening the Mangekyou Sharingan with genjutsu is possible if the individual under the genjutsu is not able to discern reality with the genjutsu