I'm not quite sure if it makes sense that he'd be around Fabletown at this time, though. From what we've seen in Jack of Fables, Paul spent almost all of his time wandering around America, just enjoying life. It's one of the reasons [i]why[/i] he was so wanted by Mister Revise: the big galoot was almost constantly interacting with mundies, and nobody could convince him to settle down and shut up.

Of course, since this is an AU, it could be that [i]this[/i] Paul Bunyan decided not to wander the world and instead settled down in Fabletown.