When it comes to my OCs/stories I make, I tend to prefer making up fiction/brands that exist within their world, rather than inserting fiction/brands that exist in our own. Sure, one upside is that I know that way I'm not accidentally getting on some IP/brand owner's bad side, but honestly it's the reasons beyond that that keep me doing it.

You're able to combine the traits from multiple preexisting things, so you can be precise with what it means within the world.
For example: If your character likes a soda, and it's meant to be gross.... if it were a real world soda, people can come into reading your story with a preexisting opinion on that soda (either thinking its gross, agreeing with the character, whatever). Meanwhile if it's fictionalized, you have to opportunity to mold the readers entire view on it, because obviously - it doesn't exist in our world.
And as already stated, you can take traits you like from real world things (in the soda example, this could be something like a packaging color) but change and combine anything else.
It's separated from any future events that happen with that fiction/brand that you in present can't know.
For this one, lemme use an example. Simon vs. the Homo Sapiens Agenda uses real world brands and fiction. For example: at one point, the character of Simon mentions not wanting to get Chick-fil-a because he's aware of their anti LGBT views/donations. So uh... the character Simon also mentions several times how he's a fan of Harry Potter.
The book was written before JK Rowling had gone mask off on her TERF ideologies, but I read the book AFTER that was well known. So I understood the context of how this happened, but it does unintentionally make Simon out to be a different character than he's meant to be. If he instead was a fan of a fictionalized work of fiction (like Henry Skreever or something) this obviously wouldn't happen.
It's adjacent to the concept I mentioned in the first point, where people can come into reading your story with a preexisting opinion on something... but you have even less control over it. Liking something might mean one thing when you write your story, or making your character - and mean another thing years down the road for reasons completely outside of your control.

These are the main reasons I fictionalize fiction/brands within my work.... but what could be some reasons to not go this route?

Quite simply, it can take away from the realism in a world. If it's important for a story to feel like it has a pulse on the world around us, it can take you out of it to hear they're going to WcDonalds, yknow?

The other more complicated reason is that it can be used as shorthand in a way. If you're describing a character, and point to a real world thing, you don't have to explain what that means within their world... the reader either innately will get it, or can look it up. If your character likes some obscure real life movie, that can be a lot of implied characterization that is only discovered through scouring... there's a joy in that! A "trusting your reader" to it.

So I get why people do it both ways, in fact I'm thinking on this concept a lot because I've been questioning where my lines lay in a newer story (the same story I wrote about having character design woes in this journal, which as an update: I've figured it out more thankfully!)

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