There are theories that several mythologies were based on actual people or events.
For example, some historians believe the original core of the Egyptian mythology was when a real king, Osiris, was betrayed and murdered by his brother Set, who was brought to justice by Osiris's son, Horus - and the rest of it was built up from word of mouth (though there is no evidence that Osiris, Isis and Set lived, there IS evidence that Horus might have been real).
The Epic of Gilgamesh may have been based on (wildly exaggerated) deeds of one man (or a group of men) - and this is also believed of the epic of Beowulf.
A lot of the Norse myths were also suspected to be highly embellished stories told by the Skald but based on real events.
1) Theseus' ship:
If in the next millennia, Napoleon gets remembered as a fire-breathing demon bent on conquest that only the deepest cold of Russia could, and eventually would, quell, how much of it would be a bona fide myth and how much of it would be based on real events?
2) The historical exaggeration hypothesis:
While some myths may be based in reality, downplaying them as exaggerations of real life events or people is a very old strategy to hinder belief in the particular religion they are attached to. Greek philosophers were already doing it with their own mythos, and Christian monks used and abused of the technique every time they encountered another religion in order to downplay it.
But what makes a myth a myth are the fantastical elements. Even the higly plausible story of Budha (rich guy abruptly discovers suffering, dumps everything, achieves illumination) has fantastical elements mixed in to give it a mystical aura (animals (and a dragon for good measure) greeting him being given dominion over the Zodiac for exemple).
So, to me, even when based in reality, myths are essentially fiction. Can we try to uncover the real events that led to myth? Sure, and it's really interesting, but reducing a myth to those events feels wrong to me. The final (or current) tale in itself is way more interesting.
Passing reference at most. He isn't even an introduced character at this point. Lol
If you are playing with Norse gods in your story, feel free to use my take above (posts got fused) as inspiration if you like it...