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Here is how I think the Legedaries work:
Note: This idea was taken from Tesh (who took it from Shiny Noctowl, so give him most of the credit!)
First, I'm taking it down small-scale:
Yes, I am aware that Celebi is in two places!
And yes, I count Arcanine, Ninetails, Dragonite, and Rapidash as legendaries!
Note: means all Fossil Pokémon!!!!!