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Fakelore.
At the root of many tall tales and urban legends is a kernel of truth. Most UFO reports are based on "real" observations, but that doesn't prove we are being visited by aliens. Many bible stories might have been based upon similarly "real" people, places or events but been blown so far out of proportion that their source is of no importance. They might as well have been made up from nothing, and they prove nothing.
But the problem is that sometimes that kernel is itself a joke or some part of another fiction story.
As I was saying, there is stuff on Snopes or The Straight Dope that originated as fiction or on some satire pseudo-news story, but then started being circulated as real. Hell, I almost cited an article when posting on JREF, but then (as sometimes, but sadly not often, I tend to do) I click on the link for their reference and land on The Onion. Someone had actually used a The Onion story as a source.
The easiest to verify is the story about the spammer found dead with a can of SPAM shoved down his troat, because we actually have the author on YouTube saying that yes, it was a fiction story and published as such. But it ended up debunked on Snopes because it started getting circulated in Emails as true. (According to Snopes it's not even the only story that had that particular trajectory, from fiction straight to urban legend.)
And that is not even taking into account cases when the story was deliberately created as a propaganda lie.
Forget even Bunyan, take the story of Alexey Stakhanov, the miner who supposedly dug up no less than 14 times his quota of coal in a day. Actually not even in a day, but in less than 6 hours. Then a couple of months later, he did 30 times his daily quota in one day.
The guys who arranged the whole propaganda event, including using several workers to dig at the same time and tally their output for Stakhanov too, knew it was fake. But they needed that for propaganda reasons, among other things, to justify brutally raising the miners' (and other workers') quotas. There's a reason for why his name was used for the Stakhanovite Movement, a.k.a., Stakhanovism.
Sure, there are some elements which are technically true. Mining was a real profession. And there actually was a miner named Stakhanov. And there was a pretense of a competition there. And coal was mined.
But in reality it was such a complete fake event, that it could have just as well been written as fiction from the start.