Well, some characters might be amused. For example, Atsushi could be a bit shocked at first, seeing the different interpretations of Dazai in the fanfiction. He might find some of the more out - there scenarios quite strange but also interesting in a way.
The students of Class 1 - A are often involved. For instance, Midoriya might be portrayed as being unjustly treated by Aizawa, and the fanfic could focus on Midoriya's struggle against Aizawa's supposed unfairness. Bakugo could also be in the story, maybe being in conflict with Aizawa's disciplinary actions.
Aizawa is still going strong in the manga. There's no event or storyline that has resulted in his death. The creators have chosen to keep him as an active character.
Dazai is not based on a true story. Usually, characters like Dazai are formed through the author's imagination and artistic expression to create an engaging narrative for the readers.