Games

Use of someone's likeness without their permission isn't illegal in and of itself, it's only illegal if it causes them some form of harm, in which case it is defamatory. And this wasn't even an exact replication of anyone's likeness, but instead a similar but quite different rendition, to the point where it's absurd to think that any of the actions portrayed by the character are defamatory to the original person.

Yeah, it's weird, but from my understanding there's nothing illegal about it. I could design a model based on a sick old man I saw at a hospital or something, and as long as my use of that model is not defamatory or otherwise causes harm to this individual, it's fair use. That's the law. It would be weird, but AFAIK totally legal.

And yeah, parodying a political figure is different, it's just the one I could find. You can still be sued for defamation against a political or other public figure, and in fact that's probably more likely, though the burden for a political figure is a bit higher (i.e. criticizing their policies is usually protected speech, even if otherwise defamatory in nature).