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That’s entirely missing the only reason Nintendo would actually pursue legal action. Many Palworld creatures appear to have literally identical base model proportions to Pokemon models. So exactly identical it’s hard to believe it could happen once by chance, much less with over a dozen different creatures. It very strongly appears they took and modified straight Pokemon models, or at best used them as a direct reference.
No. Definitively no. The models aren’t even remotely similar. Here’s an example with Lycanroc vs. Direhowl, one of the contentious pairs:
It would be literally easier to create a Direhowl-like model from the scratch than to distort Lycanroc’s model this way. And that is likely what they did, they clearly did not copy Lycanroc’s model. Similarities are simply easier to explain by the fact that both are inspired on wolves.
Same applies to other pairs of creatures.
If you want to see how reused/copied models would look like, check this. It’s from an old controversy where GameFreak lied to the players that they had to redo the models from the scratch, to justify Dexit.