This question can be divided into two as the answer falls in two different aspects.

First, How existenceless Rahu and Ketu are considered as planets in Vedic Astrology and perform well in benefic or malefic way?.

In Astrology, the results are not based on planets existence or existenceless, it is based on its effects on us.

For example, Light is having an existence, but the darkness is not having an existence. Absence of light is called as darkness.

Even though Darkness is not having an existence, it can affect our mind. People are afraid to go in darkness. Likewise existenceless Rahu and Ketu are having their importance in astrology.

They are the north and south junctions or points in the space where orbit of moon with Earth meets orbit of earth with sun. These north and south junction points acts like a black hole and creates grahans for Sun and Moon.

Why earth is not considered in Astrology?

Astrology is the prediction of our characteristics and our life incidents by the effects of other planets and stars around our Earth. So Earth itself is not considered. Its effect is available on us directly as Gravity.

If humans started living in Mars in future, then in astrology, there will be no planet called Mars, but there will be a planet called Earth.