My favorite example of this is on the island of Flores, where old local folklore says that, in the woods and caves, you can sometimes find hairy, tiny ape people.

Cue homo floresiensis, an early branch of humanity that lived on the island for a long time before homo sapians sapians showed up and had some overlapping time with them. They are very short based on what skeletons we have found....and their anatomy suggests that they looked closer to apes than humans.

Eh, it's possible, but I find it more likely that they're wild hermits, wrapped in crude bear-fur clothes. A large primate population sparse enough to be elusive but dense enough to reproduce is a dicey proposition. People occasionally fucking off to the woods to live in solitude is pretty reasonable, I've considered it myself.

I always wondered if there were small groups of isolated Neanderthals that persisted past the assimilation of the majority of the Neanderthals by homosapiens. They could have been responsible for all sorts of tales of Bigfoot, dwarves, elves, etc.

There's also Gigantopithecus

It primarily lived in subtropical to tropical forest, and went extinct about 300,000 years ago likely because of the retreat of preferred habitat due to climate change, and potentially archaic human activity. Gigantopithecus has become popular in cryptozoology circles as the identity of the Tibetan yeti or the American bigfoot, apelike creatures in local folklore.

https://en.m.wikipedia.org/wiki/Gigantopithecus

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That's like saying ghosts are real, because someone once saw a weird tree in a forrest and thought believed it's a ghost.