I'm not sure that deni-all, and denial are being used in the same sense here - but must admit that my knowledge of Kant and Frege is superficial at best.
Correct me if I'm wrong, but here it seems deni-all is as a background against which thought objects are contrasted, that would suggest that the objects in question are not constructed - leaving deni-all as the space not occupied by these objects.
I don't think that's Tversky and Kahneman's suggestion. For example, they say:
In this case, imagining human extinction probably makes it seem less likely.
This would seem to suggest that the thought object is constructed, but then denied as an unconscious result of bias in risk assessment.
You might argue; and indeed, you do where you say:
The object is to make our model coincide with reality.
...that those in denial have not grasped the object in the correct sense, but where ethics are concerned, motive and sense of duty are based on apprehension - and where apprehension is not possible ethical obligation cannot be said to pertain.
Or maybe I've got it wrong. I look forward to your thoughts on the matter.