Ultimately, the legal fiction was created to avoid having to create new rules but it creates all sorts of problems because corporations and groups in general are more like political parties and governments where they’re made up of subgroups with their own agendas and those subgroups have their own individuals with their agendas.
For example, if a corporation mass poisons people, no one typically goes to jail and instead the corporation pays a fine, very similar to what would happen if the government did that (see Flint and what PG&E did in Hinkley). You can put people in jail. You can’t put a corporation in jail and the corporate veil is insanely strong against getting pierced which causes all kinds of moral hazards.