How would you classify The Foundation? Classic sci-fi novel, right? But it has telepaths.. By modern standards, telepathy, empaths, telekinesis.. that's all magic. Fantasy. But in 20th century science fiction it was extremely common.

I would reach for John Carter of Mars (Burroughs, 1912) to make the same point.

Especially given how some of the "science fiction" elements of it read 100+ years later.

Interestingly, that was due to the top editor at a major sci fi publisher being really into psychics.

Note that in the 20th century telepathy was believed to be real.

Only for the earlier parts of that century. By the late 70s to 80s the scientific consensus was coming down hard against parapsychology but it continued to be featured in science fiction for quite some time. It was still going reasonably strong well into the 90s with popular media like Star Trek, Babylon 5, etc. You can still see some traces of it today, to an extent it has become a part of the genre that persists for legacy reasons, respect for or reference to older media in the genre.

Nearly. People born in the 20th century can do it, everyone born post-millenium cannot.

If it's called telepathy it's sci-fi, if it's called magic it's fantasy. Learn the rules!

On a more serious note, yeah scifi and fantasy can usually be distinguished, I get why it so often gets lumped in together as speculative fiction, even though it annoys me when I'm looking for one and have to sift through the other.

I don't see the problem. You yourself seem to have no trouble at all identifying The Foundation as sci-fi.

There's no clear cut line. Wizards in one, starships in the other, but there's lots of magic in sci fi and lots of space in fantasy. The two genres meld together into a continuum and so it's only fair when some people classify them together. Discrete classification of continuous phenomena will always be a bit subjective.