It's even more embarrassing when you remember that pokemon and palworld aren't even the same genre. Yes, they're both creature collectors, but pokemon is a team building jrpg, while palworld is an open world survival crafter.
You can tell that the suits at the top of Nintendo were foaming at the mouth, rabidly demanding their legal team to nuke Palworld and Pocket Pair, and their lawyers were forced to grasp at any straws they could find, no matter how flimsy, and it backfired beautifully by keeping Palworld in people's minds all the way to 1.0.
What makes it even better, is that even if PocketPair can't re add those sued features to the game themselves, the modding community has already been making huge strides to recover them. And when Nintendo tries to take a mod down, 3 more take its place.
Copyright infringing implies that Pokemon had any right to copyright those critters to begin with when half the gen 1 line is either basic animals with an elemental twist or basically copied themselves out of another game...
Since Gamefreak made a Souls-like game recently, From Software should patent the swordsmen dodging monsters game mechanic and claim Gamefreak stole their game mechanic.