They're being shifty as fuck, resorting immediately to "lel muh copyright go get a lawyer" and deleting comments, but if the offending content is removed then whatever. You know if your only defense is threatening that you would win in court, you are a grade-A asshat.
Their claim to genericism is pretty silly though, considering although it's free materials that was altered, the author claims it to be a specific character that they don't own anyways. "This is Sonic the Hedgehog" -> "now he's green and called Jim, therefore fuck you Sega" is exactly what's happening here.
Additionally, the terms of use by the author forbids use of the material and modifications in non-free works, so...