Calling this one image damning feels like corporatized media has become so dominant, people don't really get anymore how similar things need to be for it to be an actual legal issue.

Superhero comics have a lot of characters that are obvious ripoffs of characters from other publishers and yet they are still legally distinct enough that they can get away with it. Comes to mind also how Walt Disney created Mickey Mouse to replace Oswald the Lucky Rabbit which, even though he also created, was owned by Universal. Both were rubber hose-styled. black-bodied, white-faced, big-eared animal characters wearing shorts, and yet that was also legally distinct enough for his ownership of the character to be established.

It would take far more than a similar face for Palworld to be liable of anything. Sure, it's enough for people to tell they have tried to imitate it, but by itself that's not grounds for legal action.

There are some claims of copying or tracing meshes going around on social media that could be an actual issue, but the validity of those is still questionable. The Pokémon Company needs to either point out a near identical design, and I do emphasize, near identical, or to prove that stolen assets were used in the game's creation.