Which is fine as far as it goes. Those myths and legends are colorful folk tales that excite the imagination, and are not harmful if they are taken with a grain of salt by people in this day and age. For example, the supposed founder of the style I was practicing (in one version of the history) was one Yen Qing, who just happened to also be a prominent character in the novel "The Water Margin." I highly doubt this. However, the account of this character using "Mizong Stepping" to confuse his enemies and cover his tracks in the snow engages the imagination.
The problem occurs when people try to use the preponderance of myths and legends as justification for creating entirely new myths and legends that amount to outright falsehoods. Such as "We do the real 'combat' versions of CMA forms. Frog button-uniforms are just movie props. All kung fu today, even from Taiwan and Hong Kong is just performance art. The fact that Shaolin Monks today do Modern Wushu totally invalidates all those traditional forms they practice." etc.
FWIW, it seems that more than a few SD'ers take the story of the style's founding with a grain of salt, and stick with the style not because of some delusion of it being the last "real shaolin" but because they like the class. Which is awesome. Everyone should find a class they like and stick with it. If they enjoy it, and it works for them, super. The ones who believe in the stories, and believe their Mantis looks different from say, Seven Star Praying Mantis because their Mantis is more "combative" well, they deserve whatever flack they get. (combative forms... tee-hee.)
Also, it would be one thing for me to claim that my style's founder could walk using only his buttocks. It would be an idiotic fallcy for me to claim to be able to do this myself though, and never be inclined to prove it. I would be a liar if I were to teach a class and tell my students this.
"Yeah, I can totally do a 8-minute mile by walking on my glutes. But I don't feel like it today. Practice hard, kids."