Villainous Theory: The Scuffed Villains Merch and Copyright
You can see throughout the Miss Heed and Penumbra's Instagram posts that there are scuffed merchandise versions of the Villainous Gang called Professor Zeppelin, Manticore, and C.Q.D, calling them the "Agents of Dark Hood".
I theorised with heroes being popular there is a demand for action figures of the heroes as well as their Villains or popular Villains.
(Miss Heed mentions in the Shrunken she doesn't want a SunBlast action figure in her collection because he is outdated but wants the Villainous Gang in it. Miss Heed wants to be surrounded by popular things to boost her popularity. Flug, Demencia, and 5.0.5. are probably well known throughout the public as dangerous Villains through their successful Hero Extermination Services.)
However if P.E.A.C.E. starts making action figures of the Villains, there will be some possible copyright issues and most likely lawsuits from the Villains for using their image without their permission. (And obviously P.E.A.C.E. and the Villains definitely won't work together because they are enemies.)
So P.E.A.C.E. counters this possible copyright issue by creating scuffed versions of the Villains. So if the Villains say anything about using their image in their slanderous merchandise they can just say "hey these characters have slightly different names and different designs" or just outright deny and say "hey if there is any resemblance to real life it's just a coincidence".
(In one of Miss Heed's Instagram posts she was able to use Coyote's image to make her toy collection but only because she brain washed him into a simp that agrees with everything she says.)
The Villains appear to not think that much about it.
They are just probably mildly-annoyed by P.E.A.C.E. for getting away with using their image (disappointed but not surprised by P.E.A.C.E.'s actions) but don't really bother to do anything because they have better things to do with their time.
Or maybe some of them don't even notice the resemblance.
Some Villains are probably very chill with it and not make a deal of it and even buy or play the games because they are fun. As shown Ghoul, Dark Phantom, Curie, SunBlast and 5.0.5. (the user playing against SunBlast is Pachoncito, the nickname Flug calls 5.0.5.) are playing the games with the Villainous Gang on it. Penumbra also mentions that it puts in a good mood and is glad he and Curie are having fun playing and she says she might play the games in the future.
I kinda imagine GoldHeart having his own merch, video games, and probably even movies/ TV shows using the "scuffed Flug's" image and rubs it in Flug's face much to mild annoyance. 😂
Flug doesn't say anything to 5.0.5. and is fine with him playing (maybe encourage him) those games because he can see he is happily enjoying it and having fun.
5.0.5 probably notices the similarities of the scuffed heroes to him and his family and innocently thought it was sweet and nice of the developers to put the reference there.
