@wholemilk >since they (presumably) be using Nintendo properties
You're thinking about the subject with an incorrect mindset companies want you to think with.

Copyright nor trademark restrictions aren't form of property, as otherwise copyright would be perpetual and never expire (copyright is almost perpetual now, but every year really old works do get released to the public domain) and trademarks wouldn't be revoked if the business stopped paying.

@mangeurdenuage @idiot
Unfortunately, it is correct that unauthorized fanart of a character is forbidden by copyright, although non-profit parody is allowed (which I believe everything ninty on garys mod is) as well "fair use" (although that allows almost nothing).

In this case it looks like trademarks are what ninty used to file a takedown and that takedown would be valid for any mod that says "nintendo" or "mario" etc, although not for mods which don't contain nintendo's trademarks (but as always, businesses always just go ahead and censor anything they're told to censor, even if there's no legal basis for such censorship).

>you can in theory copy the character design as long as you remix it enough and that it's for non lucrative reasons.
You can draw a character that reminds the viewer of mario, but isn't called "mario" (you can call it mario-like even) and that won't infringe copyrights or trademarks.