I just assume that as long as everyone is fine with derivations produced by AI (text, pics, music), all derivations that don’t look exactly like original Pokemon are fine (also real people put some effort into those). Palworld compared to Pokemon is a much better product than, say, Fifa XX compared to Fifa XX-1. Also Pokemon series is notorious for useless editions of the same games masked as separate products - that level of rehashing feels much more illegal to me.