What is the ruling on imagining the Prophet, peace and blessings be upon him, speaking a hadith when reading it, or imagining him in a certain situation and how he would deal with it?

Mere mental imagination is not a problem; rather, it can be beneficial to imagine that the Messenger of Allah, peace and blessings be upon him, is addressing a person with his sayings, or to remember him in a certain situation to follow his Sunnah and guidance, or to recall his patience and forgiveness when harmed, in order to emulate him in that.