Might be a key reason why mods usually replace existing material instead of adding say a 9th costume.
For example: (Ultimate Salt is Real ep. 51):
Likewise, the custom "GAME!" text / music overrides something else. The timestamped person below uses Cuphead's GUI - incl. "KNOCKOUT!":
It does bring up an interesting question if they could take advantage of the expanded memory space on the next console, however.
While I'm skeptical as well, CERO is not under the government's purview AFAIK unlike China's
NPPA (National Press and Publication Administration, which says a lot). Still though, while both do have somewhat similar notions on brutal violence - even if they're enforced very differently. CERO does allow RE games to release even if they're Bowdlerized. The NPPA is even stricter: I don't believe RE has ever gotten an official Chinese release, nor does it look likely since RE2 Remake was banned.*
Which in turn does give MK a hypotheoretical avenue - it's just that Netherrealm / WB do not see that as worth it since the gore and Fatalities.
If Netherrealm / WB wanted to though they probably could reinvent the wheel a bit and enter the Japanese market through that way. Or create a MK anime - while I'm not sure how anime is regulated in Japan I don't get the impression that the blood / gore question is as strict when it comes to anime considering gory anime like Berserk and Fist of the North Star exist.
But they'd have to consider it worth it - which might be the main reason why they didn't release the Injustice games officially in Japan.
*Although that doesn't stop those interested there:
RE games have been sold under the counter on Chinese webshops, using code names like “First Day on the Job at the Police Station: Remake” (People also sell the likewise-banned AC New Horizons under code numbers like "
Number 85"):
Especially since it sounds suspiciously like a monkey on typewriter scenario.
Then again, if any 4chan leak turns out true like that Plant leak (IIRC) I'm gonna laugh out loud.