I would add my strong "yes" to your question. Legendary material is part of genealogy because it appears in so many old genealogies; making it disappear and not addressing it simply leaves it out there to cause trouble. So it's best to keep the profiles and document what the legend is and how it developed. Sometimes the legend started with a kernel of truth about a real person, and legendary material got added. That is especially important to document.
A person who never existed cannot have a parent, a spouse, or a child, so they should not be connected to other profiles. That will frustrate those who want all WikiTree profiles to be connected somehow, but if we allow connections that we are sure are not real, then I might as well claim living royalty as my parents! When parents, spouses or children are attributed to them, they should be referenced in the ==Research Notes== and linked to other profiles there. One advantage of this is that contradictory legends cease to be a problem. "The Anglo-Saxon Chronicles says she was married to [[Jones-4568|John Jones]] but Nennius says she was married to [[Legend-24|Beowulf]]. You don't have to choose which is true, because the truth you are reporting on is not the truth about the legendary person, but the truth about what each legendary source said. You're simply reporting on how the legend developed.
Where there are multiple profiles about the same legendary person, of course they need to be merged. One of the challenges in merging is always to make sure you have the right LNAB, but finding the right LNAB for someone who never existed can pose extra challenges!