Well, if you ask me, which you sort of did, you have it exaclty backwards.

A good fae story requires you to have a hard magic system. With very precise and hard rules that are being followed because breaking them would be absolutely catastrophic for the fairy in question.

It's just that the players don't know what those rules are. Sure, some of them are just common sense, be courteous, keep your promises and so on. But some of them, well, aren't. For reasons. Play this up and you will make your fae look like something truly alien, in a way which only the best sci-fi stroies have managed with actual aliens.

With this setup, you can have a game where a huge draw of it will be discovering the strange rules of this new land, not just doing the same old adventuring, just with a psychedelic coat of paint on it. If your magic rules are not hard enough, the players can't really interact with it, because their choices are limited to "don't bother" and "let's do it and pray it works".