S. R. Faruqi:

The qalandar-like style of expression is admirable. The implication is that from listening to stories of 'we' and 'I' both, in disaffection he has renounced his own self; and also that people seem to fall into thousands of categories, but in reality they're all absorbed in their own selves. In sleeping with a dupatta spread over the face there's also an implication of the renunciation of existence. In the word 'dupatta' is an implication of darvesh-ness and propertylessness.

The implication is also present that Mir will go off apart and cover his face and go to sleep, but among the people stories of 'they and we' will continue to circulate, because ordinary people don't have the stomach for renunciation of self and renunciation of life.

One meaning of mā-o-man is 'arrogance' as well, as in the [Persian] Masnavi of Maulana-e Rum (daftar 5) here and there. For example:

'If there's no faithfulness in you, then don't talk about it,
In such a case speech is only a claim of mā-o-man .'

This meaning of mā-o-man supports the interpretation that people don't have the stomach for the renunciation of self and life, and also offers the additional implication that the speaker has a darvesh-like dignity, and he's providing a warrant of the false boasting of the worldly ones. By speaking of the 'story' of mā-o-man , he's further reinforced the falseness of it. It's a superb verse.

[See also {1507,2}.]

FWP:

SETS == IDIOMS
MOTIFS
NAMES
TERMS == IMPLICATION

The two idiomatic meanings of dūpaṭṭā tān ke sonā both work beautifully here: 'to sleep in peace or with a mind at ease', and 'to sleep the sleep of death' (see the definition above). Putting the dupatta 'over the face' enhances the effect of renunciation of the ego, the personality, the affairs of daily life.

Mir Dard has his own lovely version of the same mood:

dosto dekhā tamāshā yāñ kā bas
tum raho ab ham to apne ghar chale

[friends, we've seen the spectacle of this place-- enough!
you remain; now we're off to our home]

Note for meter fans: We have to take dū-paṭṭe as consisting of two separate words, with the dū then being flexible as we would expect, so that it can be shortened. This is not a stretch, because that's obviously how it originated ('[having] two breadths [of cloth]'; see Platts p.529).