Another major difference: Palworld copied several Pokemon designs. Say what you want about Nexomon & TemTem also being a Pokeclone, but at the very least when you look at their monsters you can tell someone put effort into making them unique from existing Pokemon.
I don't think Nintendo and TPC would have done this to those games had they managed to make a crapton of money or given a partnership offer by a major video game company. While people did go "it's Pokemon but better" for both of them, the comparison to Pokemon stop on the conceptual surface level and they just become games in the monster taming genre. Palworld, while it's mechanics differ from Pokemon, has that design copying issue which keeps it tied to being compared to Pokemon. QUIZ TIME! What's the name of the Grass-type Cinderace? TRICK QUESTION! Even if you remembered it was Verdash (btw, note the similarities between the names: elemental term + quick speed term), the fact you knew I was talking about it just goes to show my point for it and many other Pals.
Huh, that's an interesting theory... though I also can't help but ask why they wouldn't just go after the trademark infringement if that was their angle.
Rereading the article, it does use the term "injunction" which, as
Worldie pointed out, means they're demanding the game stopped being sold. So yeah, Nintendo & TPC ain't going after money nor are they giving Palworld a warning, it looks like they decided they want Palworld gone. I guess in Nintendo's eyes Palworld "fucked around and are now founding out"; they had all the time and money to change their infringing monster designs, they don't need to be told this, it is obvious (actually, TPC announcing "they were aware and looking into it" was probably the warning). But nope, instead of using the influx of money they got to hire a few artists to make more unique monster designs, they doubled-down by introducing some more "not-Pokemon" designs and signing a deal with Sony.
So my new theory: Had they just done a trademark infringement that would just mean Palworld would have to change their monster designs and that would be the end of that. But nope, Pocketpair is acting cocky and so Nintendo and TPC told their lawyers "do what you need to do to kill that game".