There's two basic kinds of time travel in movies - a single timeline that's always changing (i.e. Back To The Future), or as a single fixed timeline (i.e. Bill & Ted) where changes have always happened.
We can rule out the fixed timeline in this movie, considering that 12 year old 1978 David obviously shows up in 1986, and because he still has the creature with him at the end, along with his memories of Max and his adventure. It's just like Back to the Future's single changeable timeline, so my theory is that, once David is back in 1978 (more or less "in his own time", albeit a few days older), the 1986 version of his parents and his brother Jeff we saw in the movie, ceases to exist.
Put it this way, if a time traveler were in '86 at the very end of the movie, the timeline probably would've immediately changed around them to a universe where 20-year-old David had always existed (just with his memories of the trip years before).
It's like how Marty all throughout Back to the Future would remember his nerdy dad and alcoholic mom from the beginning of Part 1, and all his adventures throughout Part 2 and 3, despite those timelines no longer existing.
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