To my understanding there's 5 ways to prove a product infringes on another:
Likelihood of Confusion: Palworld doesn't bank on being confused as a Pokemon game.
Distinctiveness: I'd say Palworld is pretty legally distinct. A lot to cover, basically 3D action game instead of turn based RPG, fantasy setting instead of contemporary setting, etcetc.
Market Segment: Pokemon is strictly on Nintendo, Palworld is not.
Degree of Similarity: Palworld is safe here. There's games like Temtem or Disc Creatures that could get sued on this basis.
Purpose of Use: Non-applicable, Palworld doesn't use any Nintendo characters, names, etc