Note that it wasn't me that said there were no limits, but I was sniping from the sidelines during the discussion. So I don't mind being in the crossfire.
I was using "narrative" the way that I presume hutchback is using here. Note that your example doesn't address his concern, which is why I jumped in.
Broady, my definition of narrative in an RPG is: "What happens in the shared imaginative space, which
could be written up after the fact as a story." I'd elaborate on that to say that each participant in an RPG has a private imaginative space that is imperfectly shared, and this complicates that definition, but that opens up a can of worms, and it isn't critical to my point (I think).
Under you definition, if I can risk extrapolating there, the shared imaginative space is expressed by the fictional reality being simulated as it intersects with the game model, as navigated by the DM and players. You kept coming back to it being a problem that something like an ooze would even know or care that it had been charmed.
Under my definition, the shared imaginative space is expressed by the fictional reality being "simulated" (not the best word) as it intersects with the game model, metagaming constructs, OOC conversations, as navigated by the DM and the players.
Under both, there is also room for DM fiat, all kinds of effects from creature characterization, and other such things. Since those are shared, I don't see them as too critical here, either. I'm just noting them to be fair to both concepts, as not as narrow as I have portrayed them above.
I think RC was picking up on the distinction back several posts. Under your model, hutchback having an ooze disregard the charm effect knowledge is either outside the rules or outside the narrative. Under my model, hutchback having a creature disregard the charm effect knowledge is inside both the rules and narrative. The shared imaginative space, and what happens, is all that matters. If a metagaming instrument changes the relatively crude result of fiction/model interaction, this is not overcoming a limit of the narrative but simply taking one choice instead of another.
Or to put it in shorter form, though problematic: If OOC we decide that the TPK didn't happen, and we retro to before the thief pulled the lever that set off the doomsday device, the only narrative "limit" is that we can't have it both ways.