Taunting does not "override" the ingame fiction, any more than fighting and killing creatures overrides the ingame fiction. In both cases, it adds new content to the ingame fiction.But you need the illusion that they are real.
It is not fun to engage with Game Mechanic NPC 721, it is fun to interact with Grodi the Goblin Marauder.
So everything that is done to NPCs by players needs to be supported by the ingame fiction.
Narrative controlling player facing rules that can override ingamr fiction are laying the game mechanics bare.