The basis for the legendary tooth fairies are the wild unseelie fae of the Upper Verge, who are indeed known to collect small items left underneath pillows in exchange for trinkets. This is, of course, not limited to teeth, and the unseelie are known to take what they wish in other circumstances. As such, the reason for their behavior is uncertain.
It ultimately represents yet another front in one of the Great Fairy War in the Collegium. On the one hand are those Collegisters who claim that unseelie fae are impossible to study or predict, being themselves irrational beings made of irrational matter, if anything. On the other side are Colligisters who hold that unseelie fae are much like seelie fae, in that they can be explained by natural processes and physical laws—said processes and laws simply have not yet been discovered.
Proponents of the former are fond of mentioning the attempted dissection of a tooth fairy by Sir Arthur Holdberry, in which the tooth fairy seemed to spontaneously revive, rampaged throughout the room stealing at least one gold coin and one tooth from a living socket, before apparently dying again and exploding, possibly as a result of being hit by birdshot fired by the same Sir Arthur Holdberry.
Conversely, those who hold that unseelie fae can be studied are quick to note how difficult it can be to ascertain if a human is truly dead, much less a fae, and that most small creatures will panic if revived in an enclosed space—to say nothing of a propensity found in many a small creature to explode if hit with a full charge of shot at point blank range.
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