Latest indie darling blow up videogame fad that you'll hear less of in a month or so. I say that somewhat derisively but I think it's pretty normal, Lethal Company was the last one and that was a neat little horror co-op game imo.
I think the reason word of mouth is spreading so much can be attributed to two things:
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It's somewhat edgy, misanthropic and subversive take on Pokemon/Nintendo's family friendly aesthetics. I can't say much about this as I haven't played the game myself to judge just exactly how much is being played straight and how much is satire (and I don't plan to), but I'd guess people who grew up with Pokemon as a franchise have been looking for that edgy take and are reacting to that, and the resulting controversy is driving the engagement algorithms (I mean just look at hexbear lmao), and
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it's fulfilling a niche that Nintendo hasn't by being an online multiplayer Pokemon-esque game that's not turn-based; just judging based on some of the clips I've seen but working together with your friends to catch a high level Pokemon-alike actually does look kinda fun. This one's really on Game Freak for allowing Pokemon to go stale by playing it safe and not innovating the game design at all, so Palworld coming in to steal Nintendo's lunch money here's pretty deserved, I think. (Although yeah, I guess Ark did it first but the cartoony character designs are doing a lot of heavy lifting in making the on-screen action legible).