I thought about it more.

I really don't like it. Not because there's no precedent, but because it doesn't work thematically.

Fey being alive, actually, undermines so much of the story in the previous two games.

It means Kratos and Atreus and the many scenes where they gradually accept she is truly gone, are wrong, actually. It means Odin was right, and that Kratos and Atreus not helping him unravel death, prevented them from reuniting with Fey.