I'm genuinely curious on how the judge will rule if that person did sue (not saying they should try).
As mentioned elsewhere the artist still has some moral and legal rights to it, even if the character concerned is not their work or otherwise authorised.
If the fan render reaches the level of copyrightable work (the threshold for it varies a bit and is surprisingly high in some cases,
https://www.ipwatchdog.com/2019/11/...ginality-dentist-photographer-case/id=115873/ , but seems within reason for this) then Nintendo (or possibly their agents depending upon contracts and who might be said to have the final say) would be the one that erred in using art they don't have rights to.
What damages or compensation could or would be awarded is a different matter. I doubt this render has any kind of copyright applied for which means the bigger stuff is probably off the table, and might also preclude some of the statutory stuff (depending upon the setup there can be an immediate fine/penalty). Likewise the author would also struggle to have monetised it in a meaningful way so depriving them of any sales gets a bit nebulous. Equally using in advertising is not like Nintendo stuck it on a tshirt/poster/postcard/... and sold it themselves. It does not excuse things but does also mean damages are less in scope than what might have otherwise been.
Nintendo would probably also turn around and try to bury the artist -- as others mentioned this would be some flavour of derived work. For a pretty good rundown of something like what might happen then pepe the frog vs infowars for some of the aspects and avenues there where they tried to strip copyright, and mined interviews/quotes from the artist, and whatever else.
If Nintendo (or their authorised agents) could be proven to have known and there were some nice emails dug up saying "let's just use this kid's picture and call it a day" that might change some things.
But yeah in the end even if the artist had a rich uncle to fund the case there would be nothing really in it. It is mainly just some egg on Nintendo's face we get to point and laugh at.
I should also note it is not the first time this sort of thing has happened
https://www.engadget.com/2008-04-20-what-the-did-ign-sneak-onto-my-okami-boxart.html
https://photoshopd.blogspot.com/2008/03/imagine-babies-whats-watermark.html