How difficult would it be to sidestep the Palworld lawsuit, anyway?
(boundingintocomics.com)
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You are missing the point entirely. This lawsuit is impossible to avoid because these patents were made after Palworld was created, specifically to destroy Palworld. Nintendo would have made different patents if Palworld was different. Nintendo is already changing the patents they are suing over, mid-lawsuit, as Palworld makes changes to avoid infringing on the previous version of the patents. Nintendo is simply attempting to crush a competitor with bad-faith legal action and must be delivered a humiliating defeat not merely in the legal field but in the field of public perception as well. We must mock them.
Does prior art not exist anymore?
That's what the patent just got rejected over, there's plenty of prior art to point to that makes these patents worthless. However, Nintendo has infinite money, time, and lawyers to file horseshit patents and sue people with. They can keep filing losing lawsuits forever and impose significant legal cost to making products that compete with Nintendo. Even if they lose every single one, they can still force small companies to spend way too much money on lawyers and potentially drive them bankrupt. That is why Nintendo has to be punished for doing this, beyond the simple cost of the lawsuit.
With the continued popularity of the Switch as the normie console du jour. That isn't likely to happen.