It is also worth noting that as of time of writing, the idea of whether or not Laozi was a single person that ever existed is less clear than originally interpreted.

One of the translations I've read more recently takes note of how it, and Zhuangzi were likely penned within the same century, and that Chinese culture of the time did not frown upon "borrowing" or "building" upon knowledge bases and presenting them as "yours".

Actually kind of an interesting attitude towards communal wells of knowledge compared to many modern attitudes, I think. The Tao Te Ching may technically be the ultimate work of textual "sampling" if there's any truth to it.

It also has to do with how legitimization works within the Chinese culture. Things with lineages and ancestors are more seen as more legitimate, and the Chinese (historically at least) are not above borrowing it.

Related is the complex and rich history of Chinese martial arts. If you ask for the oral tradition for any modern school claiming a lineage, it is often founded by a mythical founder — maybe some Shaolin monk, or a Taoist monk. There is a good case that martial art lineages are much more likely to have evolved out of military skills. It does not help that most practitioners were illiterate, and often not well-educated.

What I don’t know is if the literate class also borrowed legitimacy. I don’t think they did, because I don’t think they had to.