I thought I remembered Sinbad even being questioned about the movie in an interview and he didn't want to talk about it because it was so bad. This was way back closer to when it was supposedly released than now.

If it is all real then I figure it used as like a background psychological effect to have everyone question reality. In conjunction with movie remakes where they change history or realign your thinking into new think.

Other thoughts that other users had here. They made Kazaam with Shaq to help with plausable deniability. (That you must just be thinking of Kazaam). Another one was that some evil shit went down that they don't want out.

The hard realization is that lots of people would still have the movie on tape.