This reads like a hyperactive ramble of dialogue with little direction. Barely nothing's established of the world beyond these two talkers of dialogue, and all the reader gets from the beginning are two disembodied voices conversing in a white void. And the way! Everyone talks, like this? Makes this seem almost like! A children's show! Written for children! It's extremely grating, even if you intended it to be what a kid or a fairy tale sounds like. I get that the kid's a reality bender and he brings the fables he hears to life, which isn't a bad idea. The fable in question, however, is so far-fetched and pointless that it lacks credibility and weight - and the rest of the plot is let down by it. Overall, these factors contribute to make the story poorly-paced and almost… for lack of a better word… "inane" to read.
I was going to say it's too short, but wordcounter.net says it's 551 words, which - well, I guess you could tell a tale in 500 words or so, but it would have to describe a very small number of events if it were to be descriptive/evocative enough to draw a reader's attention. I guess squeezing something like this into so few words is partly another reason why this feels so rushed.
For what it's worth, you seem to have a definite intention in your writing, which is good. I'm getting a kind of whimsical "anything could happen and the terrible reality is obscured by the wonderful dream" vibe that's present in the SCP Wiki's LolFoundation canon.
Questions to keep in mind - What's the world of this story? Is it present-day? Is it in some alternate fairy-tale dimension where everyone talks like a guest on Sesame Street? What kind of town is this? What can you construct about the world using the fable (which, as a folk tale, is a little window into a culture's history and collective memory)? How can you make your reader care about the magical atmosphere you want to convey?