Didn't square enix and nintendo had a tardfight after release and decided to never create a Game together? Could be mandela effect tho
If it's true and culex is prohibited, the secret final boss troonex will eat kick your ass.
Short answer yes, long answer: yes, but they eventually made peace somewhat
Square was getting tired of dealing with the limitations of the SNES hardware and already started making noise that they wanted to start working in the CD-Rom format since it allowed for larger more ornate game making due to CDs holding more data than 16 bit carts. Nintendo kept dicking Square around about abandoning cartridges for CDs and when the deal to do a Sony produced CD add-on for the SNES fell through, it fucked up the production of Secret of Mana, which was designed explicitly for the CD rom format as a launch title for the SNES CD add-on, which they didn't no had been canceled until production of SOM was halfway done. Resulting in SOM having to be scrapped and redesigned from scratch to fit into the cartridge format. Something that Square never quite forgave Nintendo for, as they intended SOM to be their next big franchise and felt having to do it as a cartridge game "tainted" the game via neutering what was supposed to be a huge game changing RPG for the genre.
Cut to a couple of years later. Square just made FF6/3 and Chrono Trigger and Nintendo pinky swears the N64 is going to be CD-Rom based. And Nintendo not only is already anticipating FF7/FF4 to be a year one game for the N64 but also makes a deal with Square to make Super Mario RPG.
Then hell breaks loose. While producing SMRPG, Nintendo announces "Psyche! N64 will be cartridge based!" and for Square this is the last fucking straw. They finish Super Mario RPG but then, after a tech demo is made for the N64 just to show Nintendo they will at least try to work with the new format being forced upon them after once again being lied to by Nintendo, say "fuck this shit...." and were going to sign an exclusive deal with Sony to make games for their CD-Rom based Playstation.
Super Mario RPG is a huge big titted hit, much to Nintendo's shock as they considered it to be more of a niche game and it became the last great hit of the SNES. And Nintendo quickly realizes they are fucked for a couple of reasons. One, Square was on a game by game contract basis with Nintendo and Nintendo NEVER EVER locked down Final Fantasy 7/4 as being released exclusively for Nintendo. Second, Square AND Sony were quite open with the video game press as to WHY Square was jumping ship to Sony (Nintendo keeping the cartridge format, which Square incorporated into their marketing for FF7) and more damning to Nintendo, Square was also open with the fact that Sony promised them creative freedom and not having to worry about censorship for FF7 which was now a PS1 exclusive.
Now cut to a couple of years later; the N64 is struggling and Nintendo's largely being kept alive due to Game Boy sales and Pokemon. Super Mario 64 2 is never happening at this point but they need a new Mario game to prop up the system. So the decision is made to do Super Mario RPG 2.
Except legal chimes in and makes a huge reveal to Nintendo that most people had forgotten because Super Mario RPG was greenlit in happier times with Square AND with no eye towards a sequel. Square kept ownership of all OC characters introduced in the game (meaning Nintendo was legally barred from using Geno or Mallow or the Smitty Gang or any other SMRPG villain/NPC in future games without Square basically having to give consent/paid off.
Since they can't do a direct sequel to SMRPG nor can they get Square to help make it for them, Nintendo essentially decides to go back to the drawing board on creating a brand new Mario RPG from scratch. The end result was Paper Mario, which was a big seller but people complained it wasn't SMRPG 2. So to placate fans, Nintendo made the Mario and Luigi RPG series for the GBA/DS which visually was more akin to SMRPG visually but which incorporated elements of Paper Mario.
Meanwhile Square's riding high having changed horses to the PS1 and later PS2 but their hubris takes them down BIG TIME when their Final Fantasy movie flops and nearly kills the company. A plan hostile takeover of Enix goes south, instead of swallowing Enix whole and firing everyone involved at their rival and holding Dragon Quest hostage, Square goes from a position of strength to having to basically keep Enix intact with their leadership having their positions preserved and power intact in the new merged company. Kingdom Hearts, FF X-2, and a resurgent Dragon Quest provide much needed funds to stave off bankruptcy but Square (no longer in an exclusive contract with Sony) ultimately starts rebuilding bridges with Nintendo since the MMO FF games were doing bad and couldn't keep the lights on for them.
Nintendo gets new updated ports of Final Fantasy 1-2, 4-6 and a full-on 3D remake of 3 and later 4, a FF spin-off title (FF Crystal) for Gamecube, a Final Fantasy Tactics remake with a retooled story, a remake of Chrono Trigger, and remakes of the SNES Dragon Quest games that never saw the light of day in the US.
But the rights issue for Super Mario RPG continue to linger and while deals were struck to let it appear on the Wii Virtual Console and the SNES Classic, in general Nintendo decided to just memory hole the game since by this point they had both Paper Mario and Mario and Luigi which fans liked and which they didn't have to pay money to Square to put out.
My guess is that the chief reason we are getting a remake of SMRPG is that someone at Nintendo really likes the game enough to go to bat for it's remake being made and managed to get Square to go along with it.