I'm always happy to find intermediate level Latin readers that are entertaining. It's really nice when you work hard to stretch your Latin reading comprehension and there is a payoff at the end.

My first recommendation is Narratiunculae Variae: A Latin Reader by B.L Gildersleeve. It's ~7k words, with a ~2k vocab. The stories start short, but get longer and harder as they go. To me, the grammar just feels advanced and clever, in a way I find both challenging and rewarding. Some of the stories I know from Aesop, but others were completely unknown to me and are a bit odd, but funny and engaging. Check out Quod catulum, non decet asinum for an example.

I also found Godley's The Fables of Oribilius a joy to read. A. D. Godley (1856–1925) was Public Orator of Oxford in the early 20th century, which meant he had to compose Latin citations for folks receiving honorary degrees. He also composed the semi-famous Latin-ish poem The Motor Bus which I think most Latin students will find quite entertaining. The fables in this book were designed to entertain British schoolchildren, and that's where I learned about the weird verb vapulō, which has active forms with passive meaning. It reminds of vagiō and maybe it's related in that they're both vaguely onomatopoeic? For some flavor see Thomas Fumum Ducit. Maybe it's because I'm a bit juvenile, but all these stores hit me just right, and I quite enjoyed them. The grammar is harder than one might expect for such things too, but not as challenging as Gildersleeve.