Sherwood Smith‘s attitude towards it makes a lot of sense to me (bottom of the page): alternate universes only, because you as a fan don’t have enough information to write in the universe completely accurately. That makes sense, and gives everyone boundaries they can stay comfortably within while still allowing a great deal of leeway to write fantastic odes to Sherwood Smith’s work.
J.K. Rowling has a slightly different boundary: she loves fanfiction, but is disturbed by the porn and wishes people would stop. Given that she originally conceived Harry Potter as children’s book, and a lot of the characters can remain under the age of consent even in the more explicit works, this makes sense to me, too.
Andrew Hussie is probably the most generous with his creation: he encourages people to play all they want as long as they’re not profiting from it (it’s how he makes his living), but he sometimes lets fanart be sold through the shop, fan art gets put in the calendars, and the latest soundtrack is going to be all fan contributions. He has also unilaterally declared that all fan things are canon to the story. Given the sheer range of stories, this was most likely at least partly sarcastic, but it was hilarious and inclusive and pretty much a gift to the fandom.
They have different comfort levels in terms of fanfiction, and slightly different boundaries, but they’re all engaging their fandom about fanfiction. It works for them: people stay engaged between books/movies/updates. Of course, some fans are still going to be jerks and be impatient for new installments and express it inappropriately. But a fandom where people connect positively keeps interest up and keeps everyone happy, which is something to consider in terms of engaging readers long-term.