I feel like this is all beside the point, though.
Game and story mechanics can't be copyrighted. Art—including character design—can be copyrighted. And that is where I think Palworld might have a problem, because at least to me, many of the models look very similar.
Yeah. No one will ever confuse "Lucemon" (Digimon) with anything from Pokemon, its very distinct.
But Palworld's Fenglope is *damn* close to Cobalion (same animal, same color scheme, same subdivisions with the same color on those subdivisions).