What are the consequences of fiction being taken for fact and vice versa, particularly in the context of past discussions about the responsibilities of filmmakers and audience members?

It’s not even that unique to Chinese culture – you can’t imagine how many people didn’t realize Titanic and Dunkirk were based on true events.

What do you make of this?  What are the consequences of fiction being taken for fact and vice versa, particularly in the context of past discussions about the responsibilities of filmmakers and audience members?