Generative AI, just like a human, doesn't rely on having seen an exact example of every possible image or concept
If a human has never seen a dog before, they don't know what it is or what it looks like.
If it's the same as a human, it won't be able to draw one.
Once again you're showing the limits of AI. A dragon exists in fiction. It exists in the mind of someone drawing it. While in ai, there is no mind, the concept cannot independently exist.