As you call out (at the bottom of your OP, but not quoted here) this restates a position VB stated or restated pretty well. In more recent discussion on his blog, he argues that
He then clarifies in comments that
My current feeling on this matter is that fiction is a complex term, or perhaps that is better said as - it's a term that unpacks into some markedly different components. The relationship many folk have historically had with fiction is as a relating or retelling. I read about real or imagined events that have occurred to real or imagined people. Retold fiction has typically been the product of the workings of an author's mind. Today, it can also be a product of the workings of an AI. Something we have discussed in the past and drawn differing conclusions about, is a retelling of game play - a retelling of a chess game, for instance. When I read the "story of a game of chess" and "story by chatgpt", I might call both of those mechanically generated fictions. I could be drawn to say that the chess "fiction" is in truth non-fiction - a series of facts about the play, but then what of chatgpt? Is its fiction anything but a series of facts about (collected from) the play of its mechanisms?
There is a sense, anyway, of fiction as a product of a process. Viewed that way, boardgames and TTRPGs both produce "fiction", and this is not what I think you are talking about. I think you are talking about something closer to VBs "fictional positioning" which is fiction that will be continuously addressed during play. It is the distinctive and compelling purpose of RPG play to address that fiction.
In boardgames and TTRPGs, players continually form intents and - mediated by rules or agreements around the table - say what they are and see them enacted. In play of boardgames, such intents address the physical game state. To say it is physical is to give it independence from its authors. X and Y can play five plies into a chess game, and then hand the board to Q and R, who can perfectly well continue addressing it. (The forming of intents is not interchangeable among players, but the physical game states are.) In TTRPG, the game state is mental as well as physical. Being mental, it is not perfectly known or reified among the players and must be addressed in a sense that VB has described as retroactive. I believe it is this mental component that you are calling "the heart of RPGing".
There is something recognisable as fiction that emerges in both boardgames and TTRPGs. Player intents are common to all games. That those intents should shape the fiction that emerges is in turn common to most or all games. Again, this is not the "fiction" at the heart of RPG that I believe your OP contemplates, but the boundaries are blurred: there is a complex entanglement between emergent fiction and shared imagination. That plays out in - for one example - debates about resolution types.
I find these difficult ideas, so will leave it here not because I feel I've been entirely successful in stating my point, but - as you did - to make space for commentary before attempting to get at something more successful. EDIT, a quote from VB that I want to say should not derail or devalue your OP, but perhaps speaks to some of my feelings of caution...
I'm going to split hairs with you a little bit, and say that IMHO a game like chess does not PRODUCE fiction at all. It may be possible to write some sort of fiction ABOUT the game states, imagining the battle of two kingdoms and assigning character traits, plans, etc. to the various pieces, something like that. You could as well do that long after, so I could take a game of the great 19th Century master, Paul Morphy and write a 'story' of that game just as easily as I could a game I'm playing right now with @pemerton
! This is because there are no "leftward arrows" in chess which reach back from the mechanics to fiction. Thus the fiction doesn't really belong to the game, they are entirely disconnected things.
I would argue, and I think this follows with Vincent Baker's statements and others, that WITHOUT such 'arrows' there is no RPG. There may be a game, and there may be role play, but the two are not one activity standing together, and thus do not constitute the activity of playing an RPG. It is in this sense that RPGs are unique amongst games, and to be honest, I don't think the fact that some idle person can write a story about a chess game is even relevant to discussions of RPGs at all. Note that by this definition such things as CRPGs generally don't fall within the definition of RPG. I think its reasonable to consider them to occupy a sort of grey area, in that the fiction has no bearing on the actual play, you need not construct any fiction to play them (though they generally supply some fictional 'gloss' of the activities in the game) HOWEVER it is generally understood that one of the agendas of play may be to take game actions based on fictional motives as opposed to ones which are purely utilitarian in terms of the game mechanics. Your motivations will not however feed back into the game, there are still no leftward arrows.
Another feature of RPGs, which I believe is pretty much ubiquitous and defining is their open-endedness. In all RPGs of which I am aware, and of which I can conceive in fact, the possible situations and applications of game process cannot be enumerated. In fact, I believe that this is inextricably tied to the first part, the interplay between fiction and game state/mechanics (leftward arrows). It is this interplay which CREATES the infinite possibility space, and without that interplay such would not exist. If there is interplay between fiction and game state, process, or rules, then inevitably the game will have to deal with whatever fiction the participants have generated, which is impossible to catalog or enumerate. This is also why games like the 4e-inspired board games that WotC published are still not RPGs, even if you EXPECTED to role play, because effectively you could take a history of any of those games and simply go back and write the fiction after the fact, as it doesn't change what happens next.
Now, how is that different from 'traditional' RPGs, like early editions of D&D? The difference is in terms of open-ended interactions between fiction and rules. At some point, early on, some player picked up a flask of oil and tossed it at a monster, and there was NO RULE for that. The GM (I expect it was Dave Arneson) came up with some sort of game mechanical effect resulting from this fiction, and then that fed back into the next piece of fiction (IE "the orc, now burning like a torch, shrieks and runs off down the corridor before disappearing around a corner about 40' down."). That makes it an RPG, and I would argue the original D&D game is pretty close to the most basic form such a game can take.