Seeker
Eater of Worlds
I've had a lot of time to think recently and after that I was finally ready to give the Mushroom Biome a story like I have done with both the Corruption and Crimson. Unlike the Corruption and Crimson lore though, this will be fairly short as not much needs to be explained.
This is my theory, the Mushroom Biome is real, but its denizens are not. Allow me to explain. In the real world it is common knowledge that certain mushrooms are hallucinogens. That's only if you eat ingest them though. But in the world of Terraria, things are different. So perhaps just being around the biomes Glowing Mushrooms produces hallucinations, deadly ones. It is my belief that all the Mushroom Biome enemies are hallucinations, which is why they disappear instead of leaving behind remains when killed. Why imagine monsters thought? Perhaps if the player dies while fighting these monsters their corpse will fall to ground and nourish the mushrooms growing on it. This is all just speculation though.
Please note that when I mean "the player dies while fighting these monsters" I mean "the player kills themselves, believing there are monsters attacking him/her."