This expression is often used to convey the idea that even if a particular story or event didn’t actually happen, it reflects a truth or reality that resonates with people. The sentiment captures the essence of a story's moral or underlying message, emphasizing that its truth lies in its meaning or lesson rather than its literal accuracy.
This phrase is often attributed to Chassidic tales, where stories are told not just for their historical accuracy but for the profound spiritual and moral lessons they convey.