Please just read the posts, official articles and PSA Tweets first before overreacting.
But I will just sum it up in a bit.
- KLab has received an official license from Team Shanghai Alice to create a spin-off (fangame) based on the "Touhou Project" for worldwide distribution.
- The game is currently being jointly developed with DOBALA GAMES.
And DoBaLa Games is the one who made the bootleg game out of stolen assets and the game announced is using pretty much it.
DoBaLa Games pretty much misused the trust of KLab because they didnt know any better, meanwhile in China, they have always been very notoriously known for being pretty shady.
Its nothing new that ZUN has a legal team that oversees and curates fangames, especially for the mobile game market.
KLab generally has a good reputation in the mobile game market being project managers involved with Love Live! And Tales of Crestoria.
Now of course, supervision is a core part of their position, but it seems the lack of research made them fall for their tricks.
Its not like all of the mobile games and console fangames are all something that ZUN is against and the Legal Team is just doing whatever as long as it brings money. I mean... theres a reason why theyre there to begin with. You cant just ask him to work on his game while also overseeing the entirety of Touhou legal matters. We only got to the point of Touhou fangames on consoles and mobile devices because ZUN approved of it, dont treat it like its something out of his control. ^^;
You can make your fangames. You can also distribute them on console and Steam storefronts, you can also ask to receive a license for developing a mobile game. All you have to do is follow ZUNs guidelines for fan creations. Simple as that.