"Yes, yes, Grandpa Pahl, you were there at the big battle and you personally blew everything up with magical black dirt. Let's get you into bed now."
While I like the idea of a few of the old characters remembering the Legacy stuff as actual history and not being believed when they tell their stories because they're "too far-fetched", I think it would be a pain to manage without everybody agreeing on what did or didn't happen. Maybe references to Legacy stuff should be treated like Captain America in the comics during WWII: wild stories that just happen to coincide with actual events.