Why is Héctor disappearing if he is not really forgotten?

Question

In Disney’s movie Coco (2017), when Chicharrón disappears, Héctor explains the "rules" about the Final Death, and how in order not to be forgotten and disappear, your stories must be passed by people that knew you in life, and kept from generation to generation:

Héctor picks up his shot glass, lifts it in honor, and
drinks. He places it rim down next to Chicharrón's glass,
which is still full.

MIGUEL
Wait... what happened?

HÉCTOR
He's been forgotten.
(beat)
When there's no one left in the
living world who remembers you, you
disappear from this world. We call
it the "Final Death."

MIGUEL
Where did he go?

HÉCTOR
No one knows.

Miguel has a thought.

MIGUEL
But I've met him... I could
remember him, when I go back...

HÉCTOR
No, it doesn't work like that,
chamaco. Our memories... they have
to be passed down by those who knew
us in life -- in the stories they
tell about us. But there's no one
left alive to pass down Cheech's
stories...

Héctor is disappearing because the last person that knew him alive (his daughter) is forgetting him, but truly his (bad) story was passed from the people that knew him in life: he was an awful man that abandoned his family to pursue his dream of being a musician, and never came back home.

That's the story that is used by Abuelita, Miguel's parents, and Miguel himself to justify the family's hate for music and how Mamá Imelda started the shoe shop. And that story had to be passed by Mamá Imelda (Coco wouldn't have told it to Abuelita, as she cherished him).

So, why is Héctor disappearing if his story is still been told?

Answer 1

Note: I know almost-nothing about the real-life beliefs surrounding Día de Muertos; this is based on the beliefs presented in the film as I understood them from watching the film.

His family didn’t remember him. They remembered that Coco had a father, obviously, and that Coco’s father abandoned the family to be a musician and was terrible and so on and so forth, but they didn’t remember him. They didn’t remember his name, didn’t have any clue what he looked like, and aside from the general assumption that he played the sort of music that would have been popular in his era, they didn’t know his music.

So it’s implied that the extremely limited, generic information that they knew wasn’t sufficient to keep him around. While stories seem to be enough to keep people long after everyone who knew them in life is also dead, that story has to be personal and familial. It seems it has to be connected to a name and a photo and so on.

Coco’s father as referenced in the stories told by her family was a character. Hector was a person, and had to be remembered as the person he was in order to hold on to him. And we can assume that his family well knew what they were doing when they chose to excise him from their family’s memory—considering how important Día de Muertos was to the family, it is very likely that they specifically tailored the stories so as to ensure their stories wouldn’t be enough for him.

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I must confess, however, that it was unclear to me why Miguel’s memories of Hector, once he was returned to the land of the living, were insufficient. After all, Miguel got to know Hector quite well and was still alive. That... doesn’t really make sense. If just hearing stories about someone dead before you were born is enough, surely actually meeting them and learning their stories in their own words in the afterlife should also be sufficient. But that also would have ruined the crowning moment of heartwarming, so.