Ethics by Design (EbD) within mixed-reality contexts draws on five distinct reality types: natural reality, representational reality (RR), virtual reality (VR), augmented reality (AR) and extended/mixed reality (XR). EbD—a fusion of both ethics and design principles wherein ethics is considered throughout a project’s development period—aims to mitigate harmful effects inherent in technological advancements. However, the interpretation and implementation of EbD remain ambiguous, necessitating segregating different reality ‘types’ for analysis within XR and mixed-reality platforms in order to attain a more nuanced understanding. The article proposes a ‘good enough ethics’ (GEE) EbD approach to mixed reality, acknowledging the imperfections inherent in both ethical analyses and technology. Emphasising the importance of human-centric design, the analysis underscores the implications of blurring boundaries between what we here distinguish as five reality types and potential impacts on user behaviour and well-being. Addressing specific as well as overlapping challenges within each reality type, such as privacy concerns in VR, misinterpretation of cues in AR and the blurring of boundaries in XR/mixed reality, we advocate for transparent and ethically responsible design practices, prioritising principles of transparency, trust, consent and data protection. Furthermore, we explore the dual-use potential of mixed-reality technologies, emphasising both the ethical risks alongside opportunities for societal benefit by enhancing ethical frameworks for guiding XR technologies. The importance of longitudinal observation to assess the long-term impact of XR/mixed reality on individuals and society is underscored.