I don't see it that way, and think it actually makes sense to have him in the movie for a horror-movie cameo, and also a way for the audience to distrust him because of what we associate him with.
I think of it kind of like Last Action Hero, a movie about Arnold Schwarzenegger playing a character in one of his movies, that a child is sucked into due to a magic movie ticket. To try and prove to Arnold's character that he's in a movie, they go to a video store and the kid tries to show him an Arnold Schwarzenegger movie, but "Terminator 2" is shown to star Sylvester Stallone instead. In the movie universe he travelled to, there is no "Arnold Schwarzenegger" actor for the character played by Schwarzenegger to discover.
In this movie's universe where Freddy Krueger, Jason Voorhees, Michael Myers, etc. are all real and actual killers, they don't necessarily have to look like the actors that portrayed them in their movies in our universe.
It's the same reason that on Law & Order: SVU, no one in the squad was surprised to see a former rapist and murderer who they sent to jail in one season pop up as their new ADA in another. Diane Neal played both parts, but to the SVU team they don't both look like actress Diane Neal and happen to be triplets separated at birth.
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