But that’s not what’s going on here?

I’m addressing what the article says here:

All eyes are on Nintendo and The Pokémon Company to see if the companies take some sort of legal action against Palworld

I should’ve contextualised it better, but I kind of forgot that most people don’t read the link.

Nintendo is suing a mod creator who modded their actual IP into the game, and furthermore locked that mod through a paywall (Patreon), so, you know, profiting off of unlicensed distribution of another’s intellectual property

Yes, I am aware of that, as the second paragraph of the very comment that you’re replying shows.