Thanks to the person that sent in their opinion.
The situation looks to me like this game is going to be in a lot of legal hot water. The game allows people to make art that strongly resembles, and sometimes is the same pixel for pixel of copyrighted material.
And now they are claiming that if you make any art in the game, it legally belongs to them and you cannot use it outside of this game.
And in this particular case, the art wasn’t even made in the game. There is no art in the game that exactly resembles the art and question. The line art was made outside of the game, and copied into the game to be used to make full pieces. Then the line art was also used outside of the game to make different pieces.
I’ve been advising the person in this situation to seek legal counsel because this is a pretty big deal if the game is claiming complete ownership over every piece of art that even remotely resembles stuff created within the game. Lots of artists have created art within this game. I don’t think many would be very happy to know that the game is claiming complete ownership over all of their creations.
The moderator of the game has doubled down. I’m genuinely afraid that this action might get the whole game taken down, which is not what I want at all. I quite like this game. But if this is the path that they are going down, that means they’re claiming ownership of art of Pokémon and Mario and Star Wars and a million other franchises. Pretty much every piece of media you can imagine has some sort of player made art piece representing it within this game.
Not to mention, as I said, some pieces that were created are pixel for pixel exact replicas of existing artwork that is copyrighted. This is allowed within the game. Their rules say that you can do that. But now they also are saying that they own anything created within the game. That seems like it’s asking for trouble. 
I’m open to any feedback on this. There is more in the TOS than what I included here. I just didn’t want to include too much because I don’t actually want the game to be identified and anyone to be harassed because of this. If you have any deeper knowledge of copyright law, please feel free to contact me, and I can give you the full story in private.
I am not being directly impacted by this, but an acquaintance of mine has been banned from the game. Some people are saying it’s silly to perhaps pursue legal action because of this. But in my mind, this is not as simple as someone being banned from a game. The game is claiming to have ownership over players’ artwork. That is a copyright issue that is much bigger than any silly little game.
I don’t actually want this game to be taken down because of legal issues. I’ve been playing this game for many many years. It has its issues, obviously, but it’s one of my favorite games. I’m hoping to get people that are more knowledgeable about copyright law to help defend this person‘s case outside of court. I don’t think anyone wants this to actually go to a real lawsuit, but the moderator needs to see sense. And I’m afraid the only way will be to have Much smarter people than me explaining this to them.
Sorry for any mistakes. This is written with voice to text. And also, I’m so exhausted. I think I have a fever. I’m not doing well lol. But I’m very fired up about this lol. 
