The truth is often difficult to bear. Because of this, some people are more likely to cling onto absolutes and exaggerations. It provides them a sense of security due to the "certainty" of such. Another reason is to persuade people: extremes have been observed to catch people's attention. This includes sentiment as well. Exaggerations are also used in amusement or mockery. Thus, people use exaggerations as tools.
Exaggerations are distortions of reality. They are false beliefs inspired by truth, in that they take truth and distance it from its base, thus turning it into exaggeration. Such distortions are treatments instead of cures—one is allowed to use them, but to hold them tight is insufficient in the long run, for that the distortions will, inevitably by truth, get revealed to be what they really are: distortions. One's emotions, having been accustomed to them, will go into a whirlpool of confusion, disappointment, anger, grief and sorrow. That is understandably so, for that exaggerations were one's reality, and the shattering of so produces no easy feeling.
My advice: embrace uncertainty and consider alternate possibilities. While we are bound to our experiences, we can at least align ourselves away from living in only one reality. The world is a multi-faceted place, and accepting this truth expands our comfort zone, subsequently preventing further emotional conflict.
An exception to this is when exaggerations are used in muse. This is allowed only if its falsehood is recognised.