That's another excuse that comes up every time: 'I'm not claiming binary true/false logic, so it's ok to talk bollocks.' So what makes you think that this time it would work?
As I mentioned repeatedly before, I'm ok with probabilistic reasoning too, as long as it's sound. In fact it even makes sense to go that route.
If you want to talk probability instead, what we have here is a P(X|Y), i.e.,
the probability that
X="a given character or event is true"
conditional that we know that
Y="it's mentioned in conjunction with a real city"
But even then the negatives count. When you divide the cases where X is true by the total cases, you can't include in the total below the fraction lines only the cases where X is true. That's a biased sample.
And if you look at the sheer mass of fiction books (or stories, as you wish) that use real cities as setup, vs the true historical books (or stories, if you prefer that) that use real cities, in fact the former vastly outnumbers the latter. If you also make it conditional of it being some demigod story, then it looks even bleaker. Whether it's Hercules or Theseus or even the NT, we have more events that can't possibly be true, yet are mentioned in conjunction with real cities, than things which could even be true, even if they mention the same cities. You have more clearly made up stories like Hercules slaying the hydra of some real Greek city, or Jesus raising the dead in a real Jewish city, than stories that can even be true mentioned in those cities.
So applying that criterion, far from moving the prior UP from 50-50, it's actually moving it DOWN.
If all you have is that a story is set in a real city, then you're not coming even near to it being more likely true than false. You need more stuff to get there.
The best you can say is that it's more probable than something using a fictive city, but that isn't saying much. That probabilities are greater or equal to ZERO is already a given, not something that needs further proof. It's like saying that something is more likely to be real than my imaginary cat. So what?