Does it being a creative transformation rob the derivative work status? Personally, I'd liken the process of decompilation to that of translating a book from one language to another - the copyright on the original work does not become void merely because the process of translation requires extensive creativity.
Nicalis and Take-Two have both gone after decompilation projects, also. In particular, Nicalis has gone after a decompilation of Cave Story, but not a black box reimplementation of the same, while Take-Two ended up suing a decompilation developer (albeit settled out of court). However, in some jurisdictions, even clean reimplementations have failed - see Tetris v. Xio.
(I am not a lawyer either, etc etc, but that's my understanding)
The RE3 devs were distributing binaries. This is known to be an issue. The source code is theirs, binaries mixed with other copyrighted content is not. They also allegedly violated a EULA, but I haven’t looked closely into that.
CSE2 was distributing binaries as well.
So was SM64 decomp and Nintendo told them to stop, they did and continued to share their source code.
Tetris v. Xio is unrelated to reverse engineering or decompilation.
> The source code is theirs, binaries mixed with other copyrighted content is not.
Distributing binaries should not matter. If the binary is just compiled from the source code, the binary is just an (non-)infringing as the source code.
> They also allegedly violated a EULA
Meaningless. EULAs are not the law.
If the sources produce significant sequences that match the original binary, that binary is probably infringing. The community gets around this by distributing binary patches instead.
In some cases the EULA is what gives you access to the original binary to begin with (often the case with digital marketplaces, but also true of some physical media after 2010 or so). These have little to do with copyright, but whether someone could access the binary on the first place. To the best of my knowledge this contract law has largely been considered valid, but I try to avoid working on things with EULAs, so haven’t looked into it in depth.