Re: Cohabitation
They should be even more worried. The more money someone makes using illusion's assets the more likely they are to take action.
You obviously have a point, but there are a number of reasons because I think it's highly dubious they''ll so aggressive as to take action in the form of an instant lawsuit.
To the extent of my limited knowledge, Illusion is a japanese company and HS is supposed to be distributed only inside Japan. So they seem to have no interest in outside markets. Therefore, they won't be losing money if 'gaijins' start make games using their assets, as long as they don't post them in japanese only forums.
Secondly, even if they start taking legal action (internationally!) only to make their point, they'd need to ready themselves for a long and expensive process that won't result in less people pirating/redistributing their games.
There are other companies out there like the one starting with 'N' that are in a totally different position (both internationally and in resources available to them) and are indeed VERY active when it comes to these things, but what they're normally worried about is the image of their trademark characters as family oriented entertainment role models.
In the other hand Illusion makes adult games in the first place, so I don't think they're very worried about their characters being used for identical purposes of those in the vanilla version.
Lastly, I foresee a LOT of games making use of HS. Their models are simply beautiful and the modding community is going to make sure it'll have serious customization. So Illusion would be really busy if they want to do something at all.