If there's a chance that a causal could end up confusing it for an official product then you can bet your sweet ass that it's gonna get shut down.
Had it been its own game, meaning without the Pokémon branding and characters and acted as a homage toward the Pokémon series then it wouldn't have been shut down.
"Mother 4" will also be likely to get the shutdown treatment unless the team abandon the Mother IP and make its own original game.
That seems rather tenuous logic considering their have been Pokemon ROM hacks for like years upon years and this has never been a problem at all because surprise, kids aren't fucking morons after all and can tell the difference between official products on store-shelves and fanmade products (of course, then there's bootlegs and stuff where this stuff is sold on actual carts, but bootlegs will always be a problem of some sort or another, fangames or no fangames and are their own whole separate problem). What's changed between now and say 2004, when Pokemon Brown was originally released, no problem? Or all the other FR/LG hacks, or the R/S ones, or the D/P ones? Nintendo never had a problem with any of those, and let them sit for over a decade.
Now suddenly they're "concerned" about people being misled or whatever? Please, don't make up BS excuses for them that quickly fall apart? If Pokemon Brown didn't cause any confusion in 2004 (since you have to seek this stuff out) or any of the other long, detailed rich history of Pokemon rom-hacks and Nintendo was alright with all of those for over a decade, it's the same here. Any justification quickly falls to pieces because of their past inaction, even if they try and clean up that mess and get rid of all the others as well because the point remains, what's changed? Something clearly has, and it ain't how much "confusion" these games are causing or whatever.