Here's an answer to a similar question:
Another answer: on Gimpel the fool, realism, and the idea that we can easily separate between what’s true and not true, is presented as a position for those who (1) don’t have enough faith, and (2) have only a narrow, time-limited, and uncomplicated view of life.
When he travels Gimpel hears, “many lies and falsehoods” but he tells his readers:
the longer I lived the more I understood that there were really no lies.
Whatever doesn't really happen is dreamed at night. It
happens to one if it doesn't happen to another, tomorrow if
not today, or a century hence if not next year. What
difference can it make? Often I heard tales of which I
said, "Now this is a thing that cannot happen." But before a
year had elapsed I heard that it actually had come to pass
Throughout the story, he often realizes that he has been lied to, but takes a practical view of things, asking why he shouldn’t let people have their fantasies, or saying “I believed them, and I hope at least that did them some good,” or “What's the good of not believing?” When he chooses to disbelieve his own eyes with respect to his wife, he does so out of love, and this is presented as the proper moral position. Notice that when it comes time to do harm to other people, Gimpel does not believe the devil long enough to carry out the prank of serving the townspeople contaminated bread.