Numbers writes:
In other words, human imagination.
Well, yes.
But human imagination doesn't operate in a vacuum. Most of the fantastical things we can imagine but which don't actually exist aren't entirely 100% original. They are often wild extrapolations and elaborations of things that we can observe.
So, yes, it's human imagination at work if the abominable snowman legend is actually largely based on misinterpreted and elaborated-upon bear sightings.
Nice pic.