I don’t see Nintendo/Game Freak doing something about Palword. Due to Palworld's first trailer release two years ago. So if Nintendo/Game Freak was going to do something about Palworld. They had two years to do it.
They can try, nintendo never did, doubt they will win, and cost them the decades of good will they've gained. The genre name is either a part of the title mixed with the word clone, like, lite, or a portmanteau like Metroidvania, so it's not 100% case.
That's why Palworld did not mentioned Pokemon on the steam page and the trailer.
It's also good for business. If someone comes in not knowing about Souls games and starts seeing it, they'll wonder why it's called that.
I played both Metroid and Castlevania when I was a kid so I knew where those came from. I quit gaming for a decade or so and didn't know anything about Souls-like games when I got back. I started seeing it everywhere and it made me curious. Now I'm a fan of From and games like what they put out.
Can you imagine the ego stroking it must be to have an entire genre named after your work?
They probably could have had a case against the first game to market itself as such, but I think once the terminology gets utilized as a "common term", you can't do anything. It's why Nintendo in the 80s and 90s was so fucking adamant on pushing parents away from calling any and every home game console a Nintendo
Fromsoft would have 0 ground if they wanted to today, but honestly, again, I think it's one of those things thats such a pedestal that there would be no reason to go after it.