I think imagination is great for children but I don't think teaching a child there is a tooth fairy or santa is healthy when they may have contact with jw family.
I feel that if you tell your child a tooth fairy is real, a dub family member may tell them otherwise if the topic comes up which will be followed by “Jehovah God doesn’t like lying…….” So now you showed yourself to have lied to your child and “Jehovah doesn’t like lying” and now you have to deal with Jehovah not being real and why you told your child a toothfairy was real.......
If the child doesn’t have freaky jw family to deal with, the imaginary tooth fairy won’t hurt the little kid's trust in you as they grow out of it but if the child has any contact with jws I wouldn’t recommend telling the child about santa or tooth fairy. That’s just my view on the matter since I want my dauther's complete trust in me so when one day she comes home from a rare visit to her dub family and I have to deal with Jehoober nonsense it won't be like I lied to her before and granny only tells the truth...