Porn is inevitable though even with the laws... I think the parent is referring to people making games and writing stories based on popular franchises.

Look at game companies stopping fan made games. I remember hearing about a fan remake of PS1 Metal Gear Solid. Was gathering huge fan far and had kojima's blessing, but the studio shut it down.

https://gameranx.com/features/id/159002/article/10-incredibl...

A success story for one fan project though was Sonic Mania https://en.wikipedia.org/wiki/Sonic_Mania

I have also seen theories for movies on r/writingprompts that blow actual sequels out of the water.