First, this issue clearly arises, in part, because we live in a culture whose dominant paradigm is that there is the material world, accessible through sensation, and then there is just "everything else". This is the legacy of monotheism, which found it convenient to foster an inability to individuate incorporeals by anything other than form, because the notion of incorporeal individuals who were existential (i.e., prior to form) was integral to the henadological polytheism of the late Academy, a tenacious ideological foe, for all that we have largely forgotten it today.
When the cultural hegemony of Abrahamic monotheism began to decline, this ideological organization made it inevitable that materialism, whether crude or sophisticated, would tend to become dominant. And it remains helpful, of course, for recruitment into monotheistic faiths that the alternative in general should be materialist-atheist, rather than polytheist. In any event, the result is a lack of recognized criteria for distinguishing between Gods, angels, daimons, heroes, other deceased mortals, elementals, “nature spirits”, psychic manifestations, and whatever else shows itself in incorporeal fashion, including fictional characters, whatever mode of subsistence is theirs.
Second, something that may be missed in the debate is that the ancients also had fiction. That is, we do not only have from polytheistic societies hieratic texts, epic poems, and tragedy, which are all either in whole or in part concerned with entities that have a definite theological status. Tragedy is a hybrid form, inasmuch as it has Gods, heroes, and purely fictional characters. But there is also comedy, and in Egypt, India and Rome we definitely see the emergence, at a certain point—perhaps earliest in Egypt—of short stories, novels and plays that answer to our modern category of secular fiction. These clearly have roots in older forms of secular storytelling, namely the folktale, found in every culture.
It would be helpful in this debate, I think, to investigate how some of these ancient polytheistic cultures, and modern polytheistic cultures as well, actually talk about the relationship between these fictional works and the hieratic texts, because I think that a distinction between these textual genres is widely recognized. In the case of Egypt, we can see that the initiation of scribes prepared them, as a practical matter, to compose commentaries, at a minimum, on hieratic texts, as well as possibly creating new ones, but also to produce works of fiction. This would seem to suggest that fiction would be approached, within Egyptian thought, largely as a production of scribes, and hence as ontologically dependent upon the theological factors governing scribal production.