It's definitely a consequence I never considered as possible and frankly am not a fan of, to be clear. But fan created works are still very legally gray basically across the board. If I had heard about this sooner, I likely would've been following the case closely as I wouldn't have any clue what to expect in terms of outcome.

Ultimately though, at least insofar as the current system exists and operates, fan creations are not protected and in fact seem to be legally unprotected. In the odd event this person was correct, that one of the writers for Rings of Power adapted their work without compensation... well... it isn't entirely theirs, by definition, even if you have fan creations enshrined as fair use. There would probably have to be some legislation covering intellectual property that's derived from other intellectual property, and how that ownership then is calculated.

Certainly, expecting the Tolkien estate and a company the size of Amazon to have to pay royalties to a fan writer is just, and I'm sorry, but it's fucking absurd.