Pennywise, is inspired by the 1986 horror novel, IT written by Stephen King. The novel and the film based on him had a cult following during the 1980s, hence the legend of Pennywise began haunting some lesser-known myth hunters in the game.
The myth hunters claiming to have sighted Pennywise interlinked bizarre connections between him and the Ice Cream Man, stating both share similarities. This may be the reason for scaring away adolescents, thus giving a reason for the exclusion of minors in the game. However, the tales of Pennywise can easily be debunked, with the help of technical files. The rumors of Pennywise and nearby the circus wheel can be a reference but Pennywise doesn't physically exist in the game.