Harry Potter is not neutral. It glorifies the use of magic.
As someone who’s read quite a few fantasy books and loves the genre (though I’ve only seen the HP movies) I will say I’ve never tried to use magic. As a child when I’d play, of course magic would factor in heavily to some things I’d do, but it always clear to me that magic simply wasn’t going to work.
Now earlier you mentioned that a book shouldn’t even have demons in it. So allow me to switch the book in discussion for a little while the Wizard in Rhyme series. It’s a portal fantasy where a college English major named Matthew Mantrell gets brought to alternate history of earth which also has magic present and it works through verse in addition to a person’s character. As in, if you’re good, the more you strive to be holy, you’ll have a stronger magic and if you’re evil, the more darkness you do and whatnot, the stronger magic the demon in you will give. (I gloss over some details.) It was a rather interesting series and there was also a reliant on saints/angels for some of the bigger tasks. (For example in the first book, when the demon in the evil king comes out, that’s when a saint comes and banishes it in God’s name.) In other words, a book that had magic used by the main characters was very much a positive read.
Now you mentioned your sons read HP and are atheists. While I can’t speak to their experiences, I can speak to my own religious struggles. Reading fantasy stories was never at the heart of the issue. The issue came from misconceptions based on Fundamentalism’s permeation of what Americans think of in regards to Christianity. So when I finally realized I needed to take my Catholicism seriously (Catholic Answers’ Ask An Apologist really helped) there were definitely some things where it was like “Oh, my disagreement with this is a disagreement with Fundamentalists, not Catholicism.” Other things tied to it was also that my upbringing in the Catholic faith, while much more than many others, wasn’t informative enough for me to really know what it was so other sources filled the void.
So going back to fantasy, a series like Terry Pratchet’s Discworld, even though I was able to get the feeling he was an atheist from his novels, wasn’t anything that led me away. Rather, they were entertaining books I enjoyed reading. And the fantasy books I read are also similarly for pleasure. And in my view, if someone reads a fantasy novel and it pushes them away from faith, it’s not the fantasy novel, but other issues. In fact blaming the fantasy novel would be like saying that it was the roadside scenery that caused a traffic accident because the driver took a quick look at it, even though they were already drunk and had just hit a pothole at night.