Back to the beginning for me.
I'm not really sure how to define "art". And photographic imagination is multifaceted itself, difficult to define precisely.
I see photography, and photographs in specific, as having a dual nature. There's a literal, documentarian component: what did the camera record? And there's an abstractive component: is what was recorded intended to present a realistic rendering of the subject as our eyes might encounter it, or was it intended to do something other than that? This brings in the question of the photographers' intent ... which is where the notion of what it factual and what is artistic arises. Because it takes a human mind to establish the boundary between what is intended as fact or art, and combines the literal with the abstractive to achieve a goal.
Since I haven't seen anything that says an "AI" is aware as yet, in any but the most basic machine sense, I don't believe anything AI can create art as yet since an AI cannot imagine without awareness. A human mind can instruct an AI to do something notional, but it's not the AI that dreams up whatever that might be, it's the human mind.
I also have a little difficulty looking at composited images are being photographs. Composited images can be built up of photographic parts but are not themselves photographs, although they can certainly look like photographs. But, to me anyway, a photograph is a single instant in Time, not multiple instants captured and emplaced together. Any such compositions, whether they look like photographs or not, are art and not photographs. (My apologies, Mr. Uelsmann and others.) They can be very clever photographic simulacra, but they are certainly the result of
ars (Latin for "skilled work" or "artifice") from which art descends.
So my first order approximation of an answer to
"If a photograph carries more imagination than fact, does that make it fake, or does it finally make it art?" is that the question isn't really well-formed, it's trying to draw a single straight line through four skew points. A photograph is deemed factual when the photographer contrives with the camera to present a documentarian view of a subject for the purposes of recording. That doesn't mean it cannot also, at the same time, be abstractive and thus artistic ... e.g.: I get an assignment to do portraits of a third grade class. I want the portraits to accurately characterize what the kids look like, for sure, but I also want them to be somewhat abstractive and present them with pleasant smiles and an aura of happiness and friendliness, because that's what will make them, their parents, and their friends feel good. Another e.g.: I'm using a camera to record ground truth for a new remote sensor that I'm going to fly to Mars. I want the photographs I make with the camera to be as literal and accurate to the facts of the target as possible so as to evaluate what the sensor does when it records the scene, but that doesn't mean the ground truth can only be dull, technically correct images. It helps if the photos tell an appealing story of the target, because that's what I want the sensor to do when it is flying around Mars which I can't get to myself with a camera... be accurate and factual as well as abstractively interesting. (And believe me that I had this exact situation on assignment when I worked for NASA/JPL way back when the dinosaurs still roamed the Earth...)
With all that foofawraw gotten out of my head, I guess a straightforward answer to that question is that if the abstractive qualities of a photograph overwhelm the factual representation of the photograph's subject, and if that was the intent of the person making the photograph, then the image created slides away from being a photograph into becoming more of an art piece. And if the intent of the photograph was to document something forensically, for whatever purpose, and intentionally doesn't, then that's a fake — regardless whether it is art or not.
At this point, I'll look inwards and muse over my own photography of the past year and some to consider: What has been my intent in making the photographs I've made? And have I achieved any of it?
G