This is such a tricky area, and I commend you for writing about its trickiness. Fiction, is by its very nature, “made up”. How much of that story is based in reality is up to the writer, who has full control over the story and all that that entails. You would hope that comprehensive research is done, but that’s not always guaranteed. You would also hope that plagiarism of other people’s stories doesn’t occur, but that’s not always guaranteed either. Readers may not interpret stories as per the original intent of the writer, because they add their own filters. Readers may have their own agenda, and so too writers. It’s all so murky and fraught, and I don’t have an answer.