It has certainly morphed into this - but it wasn't precisely created for this reason. It was created as a place where GOP party lines could be broadcast clearly when other news outlets were focusing on negative facets of GOP actions. This does align pretty closely with your description of a fantasy land bubble, that's pretty apt - but the conspiracy theory stuff is a more recent development.

I do think it's fair to describe fox as openly embracing conspiracy theories - the first really big example for me was how they popularized "the caravan" for months.