So nintendo and palworld are based in Japan which has no fair use on copyright.
If this became a copyright case in Japan and palworld won it could change the law on copyright fair use in, which Nintendo and other corps don’t want as it would open up new games based on their products under fair use.
The only way Nintendo can attack palworld is via patent infringement.
Company A put out product B and used funds generated to fund product C
Every game developer does this, Destiny just wasn’t that good to start with imo i havent played 2 since the first expansion.
Its common for resources to be reallocated over time as a game ages and as new projects come online.