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Honestly imagination theory would make the most sense to me, the idea of Heath's writings being bullshit and the Paradox Pokemon being actually impossible paradoxes checks out, but I don't at all believe they'll do it because of branding. The Paradox Pokemon proved to be relatively popular, and in stuff like the TCG they specifically have the words "Ancient" or "Future" as mechanically relevant keywords.
I just don't see Gamefreak turning around and saying "Oh yeah, those cool past/future Pokemon we've been selling merchandise for? They're not real." Especially if they ever want to make other games that use time travel in some way, they'd want to make use of the already existing "past/future Pokemon" concept.
