The Purple Man was born with both a mental condition and a genetic diorder, the genetic disorder turning him purple. The mental condition caused him to kill children, and as you can see in most of the games, he is shown smiling. The mental condition caused him to do this. Besides causing him to kill children and have no control of emotion, he also had hallucinations. That means the ghost children aren't real. Another theory to go with it is you play as the killer. Mike Schmit, Jeremy Fitzgerald and Fritz Smith are all just fake titles so the police can't know who he really is. The job was taken by him so he could kill children inconspiciously,dressing in an old spring suit of Golden Freddy, since dressing in this was part of his job. This also explains his badge. The old golden spring suit also posed as a new murder opportunity. 3 days after taking the job, he began to hallucinate the dead child he stuffed into a golden springsuit Freddy suit. Years later he was in the pizzarea when he began to hallucinate the ghost children. Knowing how to get in the spring suits, he jumped into an old Bonnie suit. Although he remembered the spring suits, it had been so long since he worked at the pizzarea he forgot the rule not to breathe on the spring locks, causing his death.
If anyone has a theory to who the FNAF3 guard is (going along with my theory) let me know.