I grew up with schizophrenia. I had my first paranoid thoughts at 3 when I lost my favorite stuffed aminal and thought my cousin had stolen it, the entire family knew she did, and conspired to keep it a secret from me. At four I knew I wasn't human. Around 6 I knew cameras were hidden in buildings and invisible flying cameras followed me to record me for a secret TV show. I think I heard my first voice at 8 when a hill on the playground befriended me. By 12 I had several girls living in my head who would speak to me and each other. At 14 I had my first depressive and schizophrenic episode. I didn't get any help until my second episode at 18 and even then I was misdiagnosed. I still managed to get a BA and a master's degree; I have worked as an academic librarian for 15 years now. I was diagnosed with paranoid schizophrenia, major depression, and anxiety at 34.
Childhood onset schizophrenia is extremely difficult and often more severe than adult onset. I would not hope for it to get better but you may be able to stall the illness with your early intervention. Some early interventions can even prevent schizophrenia from developing, so that may be a hope for you and him. Watch out for puberty; it can really mess with the brain. Watch out for depression; it is common for people coming out of psychosis to become depressed.
His ability to say his brain tricked him is extremely encouraging. Try to keep him on that path. The paranoia he's displaying is more concerning to me than hearing things right now. And I have no answers for that. I struggle with it every single day. It also seems like he's sensitive to noise, so maybe some noise cancelling headphones and soothing music would help. Talk to his school and teachers and let them know that he is not acting out for attention but due to extreme stress and being overwhelmed.
If you want to learn more about how I grew up with schizophrenia, I have compiled old journal entries into a memoir which you can read here for free: https://docs.google.com/document/d/1sZE46cXq0BBGtQd2N_VOEkRqvL3dVv6hJ8uJAH204a0/edit?usp=sharing
I would also suggest you read as much as you can about schizophrenia. Surviving Schizophrenia is good, as is the Complete Family Guide to Schizophrenia. Go to Amazon and search schizophrenia books. I have not read this book, but it may be helpful: https://smile.amazon.com/Please-Stop-Smiling-Schizophrenia-Children/dp/147935211X/ref=sr_1_3?crid=32UOGC27LO5YI&keywords=schizophrenia+books+children&qid=1651255063&sprefix=schizophrenia+books+children%2Caps%2C86&sr=8-3
If you have any questions, feel free to contact me. Good luck.