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nope, still wrong. you can make a model based on a character, but models ripped from games are stolen. they have demonstrably taken down SFM porn because of this. now considering how big of a company blizzard is i'm going to assume this made it through multiple fact checks beforehand. so i guess you're still an armchair lawyer.
Two pretty obvious things: One, this has nothing to do with the legality of this games use of artwork or the point I was making about fair use. And two, just because a takedown or DMCA is filed doesn't make the content unlawful. If you believe that all DMCAs are levied in good faith then you are both blind and naive. The fact is, a big company like activision blizzard threatening legal action is usually more than enough to get the other side to back down. Websites that host the content make very little money per video upload and aren't going to spend tens or hundreds of thousands of dollars on a court case, and a smalltime parody porn renderer isn't going to have the resources to fight it in court.
But none of that changes the law. If they are taking an asset, adding to it and modifying it, putting it into a new situation and context, and creating a transformative piece of work then it's fair use. If they fought the suit they would probably win, but the cost of the suit would be hundreds of thousands of dollars in order to protect their ability to make a couple of hundred bucks per video (that they probably already got paid for). It's easier just to use different characters.
Heaps of youtube videos that review movies have been hit with DMCAs over showing freely available promotional footage in the context of a movie review, and most of them get taken down. It's obviously fair use, but youtube are a corporation that looks out for fellow corporations.
So I guess you're still an armchair naive-person.
Anywho, you are veering this away from the topic at hand. My point stands, this game is not fair use and in no way benefits the creators of the stolen art, while other games shared here often do.
If you want to debate this further please dm me. I'd be happy to talk to you more if you feel it would be beneficial.