Hey, child, that is a person over there.

Although their parents may not like this. . .

I would begin with a discussion of what is real (can be demonstrated to be possible) and what is not real or a fairy tale story.

After you establish the difference between make believe and what is possible in the real world I would begin with an explanation of how a fish's digestive system works and if it were possible for an air breathing animal to live for three days inside a fish's mouth or stomach.
then introduce a few bible goodies like Jonah and the wale (big fish) and ask them what type of a story this is. Matthew 12:40

You could also talk about how we make voice sounds (vocal cords) and ask them if snakes and donkeys have vocal cords. Then ask them if a story that has a talking snake (or donkey Numbers 22:28) is a real story or a make believe story

or you could talk about what would happen if the earth were to stop revolving (how much energy it would take what would happen to people on the earth then tell them a story about the sun not moving)
Joshua 10:11–13 Again, ask them if this is a real story or make believe.

If you wish you can go on to the great flood and how a small boat is not capable of supplying 2 of every species and how the oceans would become fresh water killing all salt water fish. . . What would the animals eat after leaving a boat with the entire eccosystem destroyed by floods? How did the penguins get there and back?

The list goes on, Then ask them if a book with these stories is a factual (based on reality) or a fairy tale book (imaginary)

You could conclude that because you believe it is important to believe things that are real and can be demonstrated to be true and you have not found any reason to consider their fairy tale book a reliable source for truth, you do not believe in their story book that tells about a god that we can not demonstrate to be true.

You could explain that God is like Santa but for delusional grown ups. Also I would encourage that you prevent them from being indoctrinated early before any permanent damage is done. Indoctrination into religion should be considered a form or child abuse IMO.

Bring it up now and you'll be the monster. Bring it up in their teens amd you'll be the cool aunt.