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It's a well-researched phenomenon, actually, confabulation is. There's even some evidence that a particular part of the brain does it. Our memories are actually kind of shitty. Things that get repeated often enough turn into "truth" if not quickly corrected when they show up. (This is how in the '80s, during the Satanic Panic, memories of "Satanic abuse" that would be physically impossible were generated and held by the unfortunate victims of unscrupulous lawyers and psychologists.) And once there, it's "confrontational" to face them with reality.

So I'm pretty sure the people I talked to believed the story after repeating it likely dozens to hundreds of times.