Harry would be heartbroken. He'd likely first try to jog their memories in simple ways, like showing them things that were important to their family. He might be in denial at first, thinking it's just a temporary thing.
One great fanfiction could be 'Lily and James: A Love Beyond'. It delves deep into their relationship before Harry was born. It shows how they met at Hogwarts, their initial dislike which gradually turned into love. The story also includes their adventures as members of the Order of the Phoenix and how they fought against the Dark forces side by side.
One great 'Harry Potter Lily and James Fanfiction' is 'All the Young Dudes'. It delves deep into their time at Hogwarts, their relationship development, and how they became the people we know from the main series. It's well - written with great characterizations.
One possible fanfiction could focus on the moments leading up to their death. It might show James trying to protect Lily and Harry until the very last moment. He could be shown using his wand to fend off Voldemort as long as he could, while Lily was huddled in a corner with baby Harry, praying for a miracle.
Well, it could lead to a very different story. Harry's childhood and upbringing would be completely changed, and the dynamics of the wizarding world might shift.
They could have adventures exploring different realms of heaven. Maybe there are places full of magical creatures they've never seen before. They might be on a quest to find a special kind of magic that can help Harry in some way, even from the afterlife.
Harry would often be a main character in these fanfictions. Since it's about bashing his parents, his reaction and how he copes with the new view of them is a big part of the story. Another could be Sirius Black. He was very close to James, so fanfictions might explore his feelings towards the bashing of his best friend.
James might be really excited. He's heard stories about his father's friends, and Teddy is like a link to that past. He'd probably be full of questions about the Marauders and what his dad was like as a student. Lily, on the other hand, would be more reserved but still interested. She might be a bit more empathetic towards Teddy, considering his difficult past. Overall, they'd both be curious and eager to learn more from him.