While the dementia is indeed a bit strong in this one (probably intentional), it is true that’s how the brain works. People like to believe in what they believe, and discard what’s impossible from being factual. If you were to witness a dead person coming back to life, one of your first thought will most likely be “this person fakes death”, “this person was just in a coma”, “a miracle happened and this person came back”, so on and so on. Anything but “revive magic is real”.
Even in the last chapter, the students called out MC’s flame as having a secret to it. They couldn’t believe that such basic magic is really that powerful, because to them that’s “impossible”. They know he is strong, but logically they cannot explain it, and therefore place an auto-assumption on him. Anything in the realm of reasonable logic to explain his unlimited power. I’m sure there’s an official name for this phenomenon that I probably don’t know of.