Corrected entry: At the beginning of the movie, Max's teacher tells the class the story of Binx and the Sanderson sisters (shown as a flashback). Later, Allison talks to Binx and says, "so the legends are true." If no one ever knew what happened to Binx, how did the story get passed down in the first place?
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Correction: When the teacher says that no one knows what happened to Binx she means no one knows what his final fate was. Obviously this is because he hasn't yet met his end. At any rate, Allison could merely be referring to the fact that the Sanderson sisters existed or else there wouldn't be a talking cat in their old hometown. And *those* legends do not require knowledge of Thackary Binx for them to be passed from generation to generation.
Phixius ★