I'm no killjoy and I'm often told I'm too imaginative, but I'm quite taken aback by this! Your kids would have had their bubble burst by other kids sooner or later. It's not like a culturally/societally agreed falsehood like Santa or the Tooth Fairy or even Easter Bunny.
Probably many kids suspect the characters in their stories (unicorns, fairies, ghosts, monsters, animals speaking English, demons, etc) exist secretly, and I might leave the question a bit open-ended.
But I thought all kids knew you're not going to find them in any big science for kids books or A-Z animal flashcards any time soon!
Anyway, I thought the whole charm/fun/point of them being magical is that they DON'T exist in verifiable form? Like if you could just pop into the zoo or forest to look at them, what makes them different from a giraffe etc? Giraffes have cool bodies and cool abilities too!
Since you are treating the "fairy forest" like an actual educational tour (instead of just an imaginative play opportunity – kids like to play pretend), why not just talk about woodland creatures that come out at night instead? I don't get it!
Also if it helps, being told the myth background/suspected sightings of Nessie, mermaids (mermaid or dugong?) etc really added to the mystery as a child. Moreso than if I was told they were a forest creature with abilities, which essentially many animals fall under.