I bumped into an interesting theory on Wikipedia that seems like a plausible backstory on the myth of Nagarjuna retrieving texts from the Naga world.
Nagarjuna’s texts from the Naga world
Pyrrhonist influences on Nāgārjuna ((Pyrrhonism - Wikipedia))
Because of the high degree of similarity between Madhyamaka and Pyrrhonism, particularly the surviving works of Sextus Empiricus,[15] Thomas McEvilley[16] and Matthew Neale[17][18] suspect that Nāgārjuna was influenced by Greek Pyrrhonist texts imported into India.
According to legend, Nagarjuna said he was influenced by books inaccessible to other people. He was approached by Nagas (semi-divine serpents) in human form. They invited him to their kingdom to see some texts they thought would be of great interest to him. Nagarjuna studied those texts and brought them back to India.[19][20][21] Matthew Neale illustrated such viewpoint inspired by Joseph G. Walser, “Nāgārjuna was a skillful diplomat concealing novel doctrines in acceptably Buddhist discourse… to conceal their doctrines’ derivation from foreign wisdom traditions.”
Sariputra and Maugalyanaputra’s teacher was named Sañjaya Belaṭṭhaputta
He was one of the 6 non-Buddhist teachers whose views Buddha refuted
Sanjaya was older and was the sage who predicted that Siddhartha might become either a Buddha or a Chakravatin King.
He was greatly respected by Sariputta, and was seen as a precursor of Buddha and similar in his view (this is the ajnana view, “not knowing” or “not saying” to remain in a middle way)
He represented a school nicknamed the eel-wrigglers, so called because they were impossible to pin down on any view. In DN 1 they are quoted as saying
Suppose you were to ask me whether there is no other world … whether there both is and is not another world … whether there neither is nor is not another world … whether there are beings who are reborn spontaneously … whether there are not beings who are reborn spontaneously … whether there both are and are not beings who are reborn spontaneously … whether there neither are nor are not beings who are reborn spontaneously … whether there is fruit and result of good and bad deeds … whether there is not fruit and result of good and bad deeds … whether there both is and is not fruit and result of good and bad deeds … whether there neither is nor is not fruit and result of good and bad deeds … whether a Realized One exists after death … whether a Realized One doesn’t exist after death … whether a Realized One both exists and doesn’t exist after death … whether a Realized One neither exists nor doesn’t exist after death. If I believed there was, I would say so. But I don’t say it’s like this. I don’t say it’s like that. I don’t say it’s otherwise. I don’t say it’s not so. And I don’t deny it’s not so.’ This is the fourth ground on which some ascetics and brahmins rely when resorting to evasiveness and equivocation.
These are the exact same words as Buddha’s unanswered questions. And these are the exact same words that Nagarjuna used to frame his discussions around the Middle Way.
Nagarjuna was trying to reveal the answer to Buddha’s unanswered questions, and doing so in a way that resembled eel-wriggling.
Nagarjuna saying that he had received texts that had been kept safe by Nagas could be veiled language to say that he had received a text (translated from the Greeks) that originally came from Buddha, and was a response to these unanswered questions. The nagas are analogous to eel-wrigglers, who cannot be tied down to a particular view.