I really wish people stopped spreading the "if you modify a copyrighted work the original creator owns what you did" thing. That's not how copyright works at all. If someone writes a story called A and you translate it and produce B, you own B. However, the creator of A owns the storyline, the characters, and so on. Meanwhile you own the words of B and the actual way things are expressed, I.E. everything you actually created by your own hand. This is why modern translations of old books are copyrighted even though the original documents are public domain due to expiry. Or why colorized versions of public domain movies are copyrighted.
This also applies to arrangements. If you take work A and compile it together with illustrations and designs that you created to produce B, the creator of A owns all of the parts that they created, and you own all the parts you created. The composite work is not solely owned by either party.
I wish this myth died but it will never be fully cleared up ever for a couple reasons. One copyright is mercurial due to relying on case law so the exact nature of what things can even be copyrighted changes. More importantly, people are made stupid on purpose about copyright, because having a fanbase of copyright illiterate (in the paranoia type) creatives is beneficial.
This really has two major impacts as far as fandom is concerned. Less important is that paid fic and fanart is probably legal, at least in many (not most) circumstances. I would recommend against it because it's a very annoying thing to determine, with any actual certainty having to be determined by a lawyer in your specific jurisdiction ($$$$$). The point stands though. This is why you can upload fanart onto Wikimedia Commons, which requires commercializable-friendly licenses on MOST contributions. Commons:Fan art has a useful breakdown.
More importantly, in my mind, is that it means rights holders cannot rip you off. This isn't extremely common but you'll see it sometimes. Because whatever you created in one of these composite works is yours, they can't use it any more than you can take their movie or book and reupload it. If you translate someone's novel, or scanlate a manga, the creator can't take your translation and republish it unless you gave explicit permission (or you die and over 150 years passes). If you draw a movie character the studio can't take that drawing and put it in their upcoming game. Of course, unless you give explicit permission. Or they use it in a fair manner, which they probably won't. And this (they can't rip you off) is the case even if you completely infringed their work! Like by posting the entire scanlated manga. The creators can't use your translation unless you give actual permission.
I understand why and where this myth comes from but it's a dangerous one. The short of it really is just "if you create something the parts that you actually created and expressed are yours." Ugh, but that's not even that great because "actually created and expressed" is important, because whatever you came up with (ideas) is not copyrightable, just the actual expressions that you created.
Also not saying that thou shalt sell their fanworks. There's a lot of good reasons to enforce a noncommercial spirit within fandom. Most rights holders only start giving a shit when money passes around, and a lot of rights holders relating to fandom are big big big. Big big big rights holders are a big big big fan of sending cease and desist letters or DMCA requests out. Neither of these actually mean anything on their own, they're as threatening as someone telling you to "GET OFF THE LAWN!" It only starts mattering if they sue you ($$$$$$$$$), but of course they are not necessarily in the right (you may have been in a park) so you might win. Nobody wants to actually litigate this stuff though (especially rights holders since it might weaken their rights), so the noncommercial attitude helps ward it off.
Plenty of commercial fanworks would not be legal, but it's for trademark reasons rather than copyright in many cases. In others, it would be about damaging the market and not being enough of a parody. In addition to allowing more badwrong horny, US law is also far stronger on fair use than what you find in a lot of jurisdictions, which is a big reason OTW is based here.
I share your frustration, but I think education is better targeted at "It's illegal for Disney to steal your fan art and use it on a product they're selling".
