I've never had a problem understanding the difference between fiction and reality. If I read something in a work of fiction that made me curious, I looked it up to learn about the reality of the subject. Frequently that reality was a long way from the fiction, but then, fiction isn't real, so that was never a surprise for me. The first time I saw Star Wars I knew Chewbacca was a dude in a furry suit (I was four), but that did nothing to dispel my enjoyment of the story. I thought it was awesome that somebody went to the trouble of making all that up and creating this non-existent world out of dreams and ideas.
The fictional stories that I write, no matter what their length might be, are just that - fiction. Not biography, not memoir, not magical or demon-hunting how-to works. Fiction. I use metaphor (oh gods how I love metaphor) and symbolism and myth and poetic license and I make stuff up. Sure, I do plenty of research, look up facts and learn lots of different things. But then I twist what I've learned and reshape it to fit the fictional narrative I am creating. I can do that, because fiction isn't real.
But frankly, I don't know what to when faced with remarks from people who are so literal they don't recognize metaphor and other storytelling tricks. It leaves me with such a mix of facepalm, headdesk, and WTF?!, I just can't even form a coherent response. So I don't respond - which I believe is the correct thing to do as long as the only response I can come up with is, "are you stupid or just dense?" Because that's not nice and it's not going to do anything but start an argument. In addition to wondering what, if any, would be an appropriate response, I also wonder why some who present themselves as readers and writers don't seem to have a good grasp of the nature of fiction. Is it the popularity of memoirs and reality television? Is it another example that the American War On Education is being won? I had great high school English teachers and remember learning about storytelling devices like metaphor and poetic license. Is that stuff not taught anymore? And if so, what has taken it's place? A few years ago a kid I knew had to watch Lord of the Rings in their English class and take a test on it. Just to be clear: an English teacher had their class watch a movie, and then gave them a test on it, rather than read the book that was the movie's source material.
I've never given much thought to the posts of agents and editors who talk about how demoralizing it can be to read slush. Now I wonder if some of that slush they're drowning in was written by people who never met a metaphor they understood. I don't mean to put anybody down, but creative writing isn't for everybody. I just know I never want to be the one that has to explain that to someone who dreams of being a writer, but just doesn't have what it takes.
I think the main point I was trying to make here is, sometimes it's best to not say anything at all. Even if you have to bite your tongue so hard you have to practically bite it in half.